Mead Johnson has announced that it has reached an agreement to be acquired by Reckitt Benckiser Group (RB) in a transaction valued at approximately $17.9 billion (including net debt).
Mead Johnson has announced that it has reached an agreement to be acquired by Reckitt Benckiser Group (RB). As a result of this transaction, Mead Johnson will become a new division of RB.RB has agreed to pay $90 cash for each share of Mead Johnson Nutrition (MJN) common stock in a transaction valued at approximately $17.9 billion (including net debt). The price represents a premium of 29% to MJN's undisturbed closing price on February 1, 2017 before market speculation of a potential transaction. Including Mead Johnson's net debt of $1.2 billion as of December 31, 2016, the total enterprise value of the transaction is $17.9 billion, representing a multiple of 17.4x 2016 non-GAAP EBITDA. 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. Mead Johnson will continue to pay its normal quarterly dividend until closing."This transaction recognizes the value of our leading brands and strong, global organization," said Kasper Jakobsen, MJN's Chief Executive Officer. "As part of Reckitt Benckiser, a bigger health care focused business recognized for its marketing capabilities, we will derive benefits from both increased scale and diversification. We are pleased that our shareholders have an opportunity to recognize significant and immediate value and are excited for the new opportunities for our employees as part of a larger company.""Mead Johnson's geographic footprint significantly strengthens our position in developing markets, which account for approximately 40% of the combined group's sales, with China becoming our second largest ‘Powermarket,'" noted RB's Chief Executive Officer, Rakesh Kapoor. "We are confident that our deep understanding of consumer needs and our expertise in scaling global brands will deliver significant growth for the MJN portfolio. We will draw on the best of both businesses and continue to build on Mead Johnson's extensive R&D, regulatory, quality and specialist distribution capabilities."