Nestlé has completed its $11.85bn (€9bn) acquisition of Pfizer Nutrition after the deal was approved by the “majority of markets involved.”
The Switzerland-based food and beverage giant announced last Friday that its takeover of Pfizer’s infant nutrition business had been completed following a recent string of regulatory green lights.
Speaking with DairyReporter.com, a Nestlé spokesperson revealed that the deal has been approved in more than 85% of the markets that Pfizer Nutrition operates in – allowing its closure under the terms of the April 2012 agreement between Nestlé and Pfizer.
Anti-trust authorities in South Africa, Kenya and five Latin American countries are, however, yet to approve the deal.
According to the Nestlé spokesperson, these markets, which represent less than 15% of Pfizer Nutrition’s sales, are “not material to the deal.”
"This deal was subject to regulatory approval in a number of markets,” said the Nestlé spokesperson. “A decision has been made in the majority of the markets involved, which now allows us to close the transaction under the terms agreed between Nestlé and Pfizer.”
In early November 2012, the Chinese Ministry of Commerce (MOFCOM) approved Nestlé’s takeover of Pfizer Nutrition – following in the footsteps of Indian and Brazilian anti-trust authorities. The Australian Competition and Consumer Commission (ACCC) later followed suit.
The Mexican Federal Competition Commission (CFC), however, declined to authorise the acquisition - citing concerns that the deal could lead to price increases of up to 11.5%.
“The rest of the markets represent less than 15% of Pfizer Nutrition’s sales and as such are not material to the deal itself,” said the spokesperson, declining, however, to discuss the remaining regulatory decisions.
“We are looking at a number of strategic options but it would not be appropriate to comment while the regulatory process is still underway in those markets.”
Through the deal, Nestlé intends to combine Pfizer-owned infant formula brands such as S-26 Gold, SMA, and Promil with its existing portfolio.
According to the firm, Pfizer Nutrition’s “strong” brand and product portfolio and geographical presence complement its own infant nutrition business.
“The acquisition will be accretive to Nestlé’s growth and margins, and its earnings per share in the full first year,” said the spokesperson.
Now that the deal is completed, the integration process is underway; including the migration of approximately 4,500 Pfizer Nutrition employees to Nestlé. The firm was, however, unable to guarantee that no jobs would be lost.
“There is a strong growth story it is not about downsizing. We plan to keep the Pfizer Nutrition factory network intact. We want our employees and our customers to experience a seamless transfer of ownership. However, the integration process has only just begun so it would be premature to comment in detail our plans for the business at this stage.”