Reckitt Benckiser swallows baby formula maker Mead Johnson for $16.6bn
Consumer goods conglomerate Reckitt Benckiser is set for a growth spurt after acquiring baby formula supplier Mead Johnson in a $16.6bn deal ($17.9bn when debt is included).
Best known as the parent behind established brands such as Durex and Dettol Reckitt, Benckiser gave the mammoth purchase the green light in order to give itself a foothold in the burgeoning Chinese market and consumer health sector.
Interest in China has been piqued by the scrapping of its one-child policy, a move which consumer goods firms are keen to exploit by tapping into a potentially huge new market now that Chinese couples are allowed to raise two children.
This relaxation of birth control policy saw the number of new born’s rise 7.9% in 2015 to reach 17.86m – the highest figure attained this century and fueling expectations of a boom in demand for food, formulas, clothes and medicine.
Mead Johnson posted sales of $3.7bn last year and is best known for the Enfa infant formula brand.