Nestlé quiet on latest Danone medical nutrition takeover 'market rumors'
Numerous news outlets, citing sources close to the companies, have reported that Danone is in talks with Switzerland-based Nestlé regarding the sale of its medical nutrition business.
It was reported in February 2014 that Paris-based Danone had called in financial services provider JP Morgan to advise on potential buyers.
Abbott Laboratories, Nestlé, Baxter and Fresenius were among those initially pinpointed as potential suitors. But with main rival Fresenius now reportedly out of the race, Nestlé is favorite to acquire the business division.
Approached by DairyReporter.com, Nestlé declined to provide comment on what it described as "market rumors."
"As a matter of principle, we do not comment on market rumors," said Philippe Aeschlimann, corporate spokesman at Nestlé.
Danone provided a similar response, telling DairyReporter.com: "We have no comment on these reports."
€3bn price tag?
Danone’s medical nutrition division manufactures products for those weakened by illness or chronic conditions.
Its portfolio includes liquid food for hospital patients unable to eat solids, food supplements for elderly people with failing appetites, and products for those that suffer from allergies.
It was reported in February that the business could fetch up to €3bn (US$4.1bn).
In recent years, the division has reported a slow in growth, which Danone attributed in 2012 to "deteriorating conditions in some markets in Western Europe."
For the first quarter of 2014, however, the business segment reported sales of €328m (US$450m) - a 5.2% like-for-like increase. Danone attributed result to "a stronger boost from pediatric care brands" and improved sales in Turkey, the UK, the Middle East and North America.
It has been suggested that cashing in on its medical nutrition division would enable Danone to focus on its infant nutrition and fresh dairy products divisions, which have been impacted by declining consumption in Europe and reputation issues in Asia.
