Tags: Danone | Nestle | medical | nutrition

Danone Said in Talks to Sell Medical-Nutrition Unit to Nestle

Monday, 12 May 2014 06:31 AM

Danone is in advanced talks to sell its medical-nutrition business to Nestle SA after Fresenius SE dropped out of the process, according to people familiar with the matter.

While a sale to Nestle is the most likely outcome, the transaction faces antitrust hurdles in some western European markets where the two companies operate, said the people, who asked not to be identified as the deliberations are private.

Talks with Nestle could still fall apart and Paris-based Danone could decide against a sale, the people said. There are still other bidders interested in the medical-nutrition business, one of the people said. Danone, the world’s biggest yogurt maker, could fetch about 3 billion euros ($4.1 billion) from the sale, the people said.

Fresenius, which was considered one of the strongest contenders for the unit, is no longer interested, the people said. Chief Executive Officer Ulf Mark Schneider last week said the company isn’t working on deals bigger than 1 billion euros at the moment.

Representatives for Danone, Nestle, which is based in Vevey, Switzerland, and Fresenius declined to comment.

Sales at Danone’s medical-nutrition unit, which includes Fortimel to counter malnutrition and Neocate, a hypoallergenic product for children, rose 5.2 percent in the first quarter on a like-for-like basis to 328 million euros. Revenue at the division was about 1.3 billion euros for all of last year, representing about 6 percent of the group total.

The unit gets 67 percent of sales from Europe and counts the U.K. and France as its two biggest markets.

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Danone is in advanced talks to sell its medical-nutrition business to Nestle SA after Fresenius SE dropped out of the process, according to people familiar with the matter.
Danone, Nestle, medical, nutrition
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2014-31-12
Monday, 12 May 2014 06:31 AM
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