Merger Agreement
Acquiree: Mead Johnson Nutrition Co manufactures, distributes and sells infant formulas, children's nutrition and other pediatric nutritional products. Its product portfolio addresses nutritional needs for infants, children and expectant and nursing mothers
Acquirer: Reckitt Benckiser is a consumer health and hygiene company. The Company manufactures and sells branded products in the health, hygiene and home categories
1. Price: Reckitt Benckiser has agreed to buy U.S. baby formula maker Mead Johnson Nutrition for $16.6 billion, giving the British consumer goods company a new product line and expanding its presence in developing markets.
2. Acquisition cost: cash offer (US$90 a share), Reckitt will pay $90 in cash for Mead Johnson shares, including Mead Johnson's debt, the deal is worth $17.9 billion and Reckitt Benckiser said it would finance the acquisition with debt underwritten by Bank of America/Merrill Lynch, Deutsche Bank and HSBC
3. Deadline of merger (Q3 2017): Subject to shareholder and regulatory approvals, Reckitt expects the Mead Johnson deal to close by the end of the third quarter
4. Breakup contingencies (not disclosed): The transaction has been unanimously approved by the Mead Johnson Board of Directors. Closing of the transaction is subject to customary conditions, including approval by shareholders of both Mead Johnson and RB and regulatory approvals, and is expected to occur during the third quarter of 2017. Robey Warshaw and Bank of America Merrill Lynch were Reckitt's lead financial advisers, while Deutsche Bank was a financial adviser, corporate broker and sponsor. HSBC was also an adviser to Reckitt.
5. Government antitrust possibilities: The parties expect the transaction to close by the end of the third quarter. China will become Reckitt's second-largest market behind the United States following the acquisition of Mead Johnson. Reckitt said its goal was for the Mead Johnson business to perform at the upper end of an estimated sector growth rate of 3 percent to 5 percent per year in the medium to long term. The deal is subject to shareholder and regulatory approvals ( Government antitrust possibilities are not disclosed yet).