Reckitt Benckiser acquires Mead Johnson for $16.6 Billion

World’s leading consumer health and hygiene company Reckitt Benckiser Group is in agreement to acquire Mead Johnson for 16.6 billion dollars. As a result of it, Mead Johnson will become a new division of Reckitt Benckiser group with its globally recognized Enfamil and Nutramigen brands joining RB’s portfolio of leading consumer health brands.   

The move by British consumer-goods company RB will allow it to push further into healthy products. Last week, RB confirmed that it is in 16.7 billion dollar discussions to takeover Mead Johnson Nutrition Company. It had previously been reported that Nestlé was also gearing up to bid for the US infant formula and vitamin maker.

The terms represent a premium of 29% to the closing price of Mead Johnson of $69.50 on 1 February 2017, before speculation of a possible transaction, and 24% to Mead Johnson’s 30-day volume-weighted average price of $72.37 at the same date.

Mead Johnson may continue to pay its normal quarterly dividend until completion, not to exceed $0.4125 per share, to be declared and paid on dates consistent with the 2016 quarterly dividend declaration and payment dates.

The transaction is subject to shareholder and regulatory approvals. The boards of RB and Mead Johnson have both approved the transaction and have resolved to recommend that their respective shareholders vote in favor of the transaction.

The acquisition of Mead Johnson is aligned with RB’s well established strategic focus on growing in consumer health and on investing in Powerbrands with attractive growth prospects. RB already reaches millions of mothers through its hygiene education programs and, through world class brands such as Nurofen and Mucinex, provides parents with relief and reassurance when their children are unwell.

This will be enhanced by Mead Johnson’s deep understanding of a new mother’s journey and well established relationships with healthcare professionals. Mead Johnson is a leader in the global infant and children’s nutrition category which is worth approximately $46 billion in annual sales. RB expects the category to grow at approximately 3-5% per annum in the medium to long term.