Cillit Bang and Dettol maker Reckitt Benckiser has confirmed it held talks to buy US baby formula maker Mead Johnson for $16.7 billion (€15.5 billion).
The UK household products giant said it was in advanced talks with Mead Johnson over a potential deal worth $90 a share.
It added they were “engaged in a period of due diligence and contract discussion”.
The deal would boost Reckitt’s US and Asia business and help it expand its health division.
The talks come after Reckitt lost out to rival Bayer in the tussle to snap up Merck’s consumer business in 2014.
Reckitt – whose brands also include Nurofen, Durex condoms and Harpic toilet cleaner – recently revealed a third quarter hit from its South Korean operation after a disinfectant scandal.
The group said in October it had started paying compensation from a £300 million (€350 million) fund after admitting that a humidifier disinfectant produced by the company had killed 96 people in South Korea and caused illness for a further 400.
It said third-quarter like-for-like revenues in developing markets rose 7 per cent to £788 million, but were pegged back by a sales drop in South Korea after consumers boycotted its products.
Revenues
Overall group like-for-like revenues, which strip out exchange rates, acquisitions and disposals, rose by a worse-than-expected 2 per cent in the three months to the end of September.
Under the leadership of chief executive Rakesh Kapoor, Reckitt has been on the hunt for a major acquisition for some time, but it stressed there was “no certainty” of a deal with Mead Johnson.
Mead Johnson, based in Illinois, had annual sales of $3.7 billion in 2016, down 8 per cent on a year earlier. The group makes more than 70 nutritional products in over 50 markets worldwide.
Confirming discussions with Reckitt, it said: “Mead Johnson remains committed to doing what is best for its shareholders, employees and, as always, the children, families and health care professionals around the world who trust and depend on its products and expertise.”
– (PA)
