Danone bids for baby food maker
Danone wants a share of the baby food market
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Tuesday, 10, Jul 2007 11:57
French food group Danone has announced that it is seeking to buy Dutch baby food manufacturer Royal Numico as part of a €12.3 billion (£8.3 billion) offer.
The company claims that the proposed deal will make it the "most powerful" health food group in the world.
In a joint statement with Danone, Numico said that its board had decided to unanimously recommend the €55 (£37) a share offer to its shareholders.
The bid represents a 44 per cent premium on the average closing price of Numico's shares over the past three months, the two companies said.
Danone emphasised that its bid for Numico would provide it with a further opportunity to drive growth and profits within the group.
Netherlands-based Numico, rated as the world's third-largest seller of baby food in 2005, manufactures popular brands such as Cow & Gate, Milupa and Nutricia – which between them are thought to hold around 40 per cent of the European market.
The offer comes after Danone, the makers of various yoghurt ranges and Evian water, revealed that it is in talks over a possible €5.3 billion (£3.6 billion) sale of its biscuits and cereal business to Kraft Foods.
Analysts believe that Danone's own bid for Numico, which also produces clinical nutrition brands, may be an attempt to fend off any prospective takeover offers.
Speculation arose over the weekend that soft drinks maker PepsiCo may make bid for the French group.
Commenting on the proposed deal, the details of which are expected to be agreed over the next few weeks, Danone chief executive Franck Riboud said the offer reflected "the outstanding quality and positioning of Numico as one of the world’s leaders in healthy nutrition".
"The combination of the two groups will create a unique food company – the one with the clearest and most powerful health positioning in the world," he added.
Numico chief executive Jan Bennink added: "I am confident that a combination with Danone and the position of Numico within the enlarged Danone group will ensure its continued growth momentum for the future."