Danone and Mead Johnson may make a joint bid for the €8bn infant nutrition-dominated Pfizer nutrition business that is up for sale, according to press reports.
The Financial Times quoted “a lending source and a person with knowledge of the situation” commenting that a joint bid could avert any anti-trust issues derived from a single bid, a problem that is very real to the other main interested party, Nestlé.
The Danone-Mead Johnson idea may be submitted to Pfizer which has demanded all interested parties explain resolutions to any potential competition issues.
The UK, Ireland, New Zealand, Australia and Turkey are seen as anti-trust hotspots for Danone; China for Mead Johnson where it dominates the infant formula market.
Nestlé would have likely issues in Australia and Mexico.
“While we continue to evaluate a variety of options for our nutrition business including a sale, spin off or other transaction, our preference remains to favour one overall option rather than dividing assets and business operations,” a Pfizer spokesperson told the paper.
Commitment to drugs
Pfizer has said it wants to commit to evolving its pharma businesses as the principle reason for the sale of the division that turned over about €1.5bn in 2010.
The move has puzzled some analysts given Pfizer only took possession of the division in 2009, as part of the $68bn (€51.8bn) buy-out of Wyeth, and it has acquired a danish supplements business called Ferrosan in that time and establaished infant formula R&D partnerships.
Products in the division include the SMA Gold line of products for infants and children and Enercal supplements for adults. These products sell in more than 60 countries.
While there are those that are promoting a diversification strategy for pharma players faced with generic competition to something like €100bn+ in blockbuster drug sales as patents expire, Pfizer CEO Ian Read has made it clear his company is diving headlong into developing the next generation of blockbuster drugs.
It has indicated its animal nutrition business – which with human nutrition generated 8% of the giant’s income – may also go up for sale.