Mexican officials block Nestlé’s Pfizer Nutrition acquisition

By Mark Astley

- Last updated on GMT

Mexican officials block Nestlé’s Pfizer Nutrition acquisition

Related tags Mexico

Nestlé’s $11.85bn (€9bn) acquisition of Pfizer Nutrition has been blocked by Mexican competition officials over concerns that the deal could lead to price increases.

The Mexican Federal Competition Commission (CFC) announced yesterday that it would not authorise Nestlé’s acquisition of Pfizer’s nutrition business as it would give the Switzerland-based food and beverage giant too high a share of the domestic infant formula market.

According to the Mexico City-based authority, the transaction would allow Nestlé's share of the stage one and two infant formula market would increase to nearly 70.6%, and its share of the stage three market to 88.2%.

This, according to the CFC, would leave the door wide open for Nestlé to increase unit prices by up to 11.5%.

Through the deal, which was agreed in April 2012, Nestlé hopes to expand its already bulging infant formula portfolio with the addition of Pfizer-owned brands such as S-26 Gold, SMA, and Promil. approached Switzerland-based Nestlé for comment relating to the CFC decision, but not reply was forthcoming before publication.

‘Harmful effect’ on competition

“The Plenum of the Federal Competition Commission (CFC) decided not to authorise the acquisition of the Pfizer Inc’s nutrition business in Mexico by Nestlé SA, considering that the notified transaction imposes a real and substantial risk to competition and free competition,” ​said a translated statement from the CFC on their decision.

“Nestlé and Pfizer submitted a proposal of conditions that proved insufficient to prevent harmful effects on competition arising from the notified acquisition.”

“In these circumstances, the CFC analysis showed that, if carried out, the operation would allow Nestlé to increase standard infant formula prices by between 2.9 and 11.5%, depending on the brand,”​ the statement added.

Nestlé and Pfizer Nutrition have 30 days to lodge an appeal with the CFC.

Chinese approval

Earlier this month, the Chinese Ministry of Commerce (MOFCOM) approved the proposed acquisition – following the footsteps of the Brazilian Council for Economic Defence (CADE) and the Competition Commission of India (CCI), who approved the deal earlier this year.

Analysts have previously warned that Nestlé may be forced to carve up Pfizer Nutrition to meet competition authority demands.

More to follow……

Related news

Show more

Related products

show more

Custom Microbiome Solutions for Dairy & Alt-Dairy Products

Custom Microbiome Solutions for Dairy & Alt-Dairy Products

Content provided by ADM: Innovation that Feeds the Future | 13-Oct-2023 | White Paper

Backed by clinical studies and perfect for use in dairy and alt-dairy applications alike, ADM’s Active Lifestyle probiotic blend, BPL1™ probiotic, and...

Consumers Want Dairy—and More!

Consumers Want Dairy—and More!

Content provided by ADM: Innovation that Feeds the Future | 06-Oct-2023 | White Paper

In the thriving dairy industry, you’re well aware of the surging demand for both dairy and non-dairy products.

Flavor and Functional Ingredients in Dairy Beverages

Flavor and Functional Ingredients in Dairy Beverages

Content provided by Virginia Dare Extract Co Inc | 01-Sep-2023 | White Paper

Dairy-based beverages have innate benefits, like protein and indulgent texture, making them a popular choice for sports nutrition, energy, and personal...

Natural and Delicious Vanilla Solutions

Natural and Delicious Vanilla Solutions

Content provided by ADM | 13-Jun-2023 | Infographic

The world’s most popular flavor is vanilla - and ADM can bring that delicate taste and enticing aroma to life for your brands with sustainable and socially...

Related suppliers