$11.85B Global Infant Formula Deal Largest European Merger & Acquisition Ever
|Pfizer's infant formula product line. Photo: Pfizer|
Pfizer is the world's largest drug company. Its focus is developing new prescription drugs. It acquired its global infant formula unit when it purchased Wyeth in 2009 for US$68 billion. Aside from Nestlé, French based Danone was interested in purchasing Pfizer's global infant formula unit.
Nestlé's acquisition of Pfizer's global infant formula unit will give it greater access to emerging market. It will also create marketing ties between Nestlé's baby food unit and global infant formula unit. Nestlé's baby food unit is based in part on its purchase of the Gerber brand in 2007 for US$5.5 billion. Pfizer's global infant formula market generates 85% of its revenue from developing countries.
According to Euromonitor International, with this M&A, Nestlé will hold approximately 10% in China's baby food market and 38% in the Middle East and Africa. The global baby food market and global infant formula market are both expected to grow 10% annually between 2012 and 2016, with most of the growth in the developing world.
For more see:
Scott, Mark. "Nestle to Buy Pfizer’s Infant Nutrition Unit for $11.9 Billion," New York Times, 23 April 2012.
"Nestle wins pricey battle for Pfizer baby food unit," Reuters, 23 April 2012.
"Nestlé to acquire Pfizer Nutrition in strategic move to enhance its position in global infant nutrition," Nestle Press Release, 23 April 2012.