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Nestlé quiet on Pfizer Nutrition-driven Latin American assets sale rumour

By Mark Astley , 10-Jan-2013
Last updated on 10-Jan-2013 at 17:22 GMT2013-01-10T17:22:31Z

Nestlé has refused to comment on reports that it is working with financial advisory group Rothschild to sell more than $1bn of Latin American assets in an effort to win regulatory approval for its acquisition of Pfizer Nutrition.

Bloomberg reported yesterday that the food and beverage giant is in the early stages of a process to sell assets in a number of Latin American countries to meet the demands of competition authorities in the region.

DairyReporter.com approached Switzerland-based Nestlé, but the company declined to confirm or deny the reports.

“We never comment about reports of possible acquisitions or divestitures, or about on-going regulatory processes,” said Nestlé spokesperson, Philippe Aeschlimann.

Financial advisory group Rothschild was also contacted, but declined to comment on the reports.

Regulatory processes “on-going”

Nestlé spokesperson Aeschlimann confirmed, however, that regulatory processes are still on-going in five Latin American countries including Chile, Colombia, Ecuador, Mexico and Nicaragua.

Anti-trust authorities in South Africa and Kenya are also yet to approve the deal.

According to the Bloomberg report, Mexico is likely to be among the countries targeted for divestment.

The Mexican Federal Competition (CFC) declined to authorize the acquisition in November 2012, citing concerns that the deal could lead to price increases of up to 11.5%.

It is assumed that the rumoured Latin American carve-up will draw interest from global infant formula manufacturers such as Danone, Mead Johnson Nutrition, and Abbott Laboratories.

"Not material to the deal"

Nestlé completed the $11.85bn (€9bn) acquisition of Pfizer Nutrition in December 2012, despite still seeking approval from competition authorities in the five Latin American nations, South Africa and Kenya.

A spokesperson for Nestlé previously told DairyReporter.com that these markets, which represent less than 15% of Pfizer Nutrition’s sales, are “not material to the deal.”

By December 2012, more than 85% of the markets that Pfizer Nutrition operates in had given the deal the go-ahead – allowing its closure under the terms of the April 2012 agreement between Nestlé and Pfizer.

The Chinese Ministry of Commerce (MOFCOM) and the Australian Competition and Consumer Commission (ACCC) approved the deal in November 2012 – following in the footsteps of the Brazilian Council for Economic Defence (CADE) and the Competition Commission of India (CCI).