RB reveals £13.2bn plan to takeover US firm Mead Johnson
TAKEOVER TALKS: RB is in discussions with US firm Mead Johnson
By Hull Daily Mail | Posted: 3 Feb 2017
Hull firm RB, formerly known as Reckitt Benckiser, has confirmed 16.7bn US dollar (£13.2bn) talks to buy US baby formula maker Mead Johnson.
The UK household products giant said it was in advanced talks with Mead Johnson over a potential deal worth 90 US dollars (£71) a share.
It said they were "engaged in a period of due diligence and contract discussion", adding: "There is no certainty that any transaction will ultimately be agreed, nor as to the terms on which any transaction might occur."
The deal would boost RB's US and Asia business and help it expand its health division.
The talks come after RB lost out to rival Bayer in the tussle to snap up Merck's consumer business in 2014.
RB - 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 £300m 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 £788m, but were pegged back by a sales drop in South Korea after consumers boycotted its products.
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, RB 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 3.7bn US dollars (£2.9bn) 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 RB, 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."
The company is currently investing £105m in a new Centre for Scientific Excellence in Dansom Lane, east Hull.
Speaking last year, Dr Sharon James, senior vice president for research and development at RB, said: "This is an ambitious project which will transform our R&D health offering so it's very exciting to see the progress that has been made since planning permission was granted this time last year.
"Healthcare is changing at a rapid pace and we want to continue to be at the forefront of innovation, providing people with new solutions and brands that allow them to lead healthier lives."