Reckitt Benckiser has agreed to buy US baby formula maker Mead Johnson for $16.6 billion.
The UK-based household goods giant said the purchase would help it grow in China, and provide “a significant step forward” in its efforts to become a “leader in consumer health”.
Mead Johnson makes infant formula under the Enfa brand and had sales of $3.7 billion in 2016.
The deal is worth $17.9 billion once Mead Johnson’s debt is taken into account.
Mead Johnson chairman James Cornelius said Reckitt Benckiser’s offer provided “tremendous value” to shareholders.
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They will receive $90 per share, 29% more than its $69.50 share price on February 1, before bid speculation began.
China’s 2015 decision to scrap its one-child policy could be an opportunity for consumer goods companies.
Couples are now allowed to have two children after concerns about China’s ageing population led the government to reverse the decades-long rule.
In 2016, China’s birth rate was the highest this century, with the number of newborns rising by 7.9% or 17.86 million in 2015.
As a result of this baby boom, analysts expect demand for food, formula, clothes and medicine to grow.
Reckitt Benckiser said it would fund the purchase with loans from its banks Bank of America Merrill Lynch, Deutsche Bank and HSBC, and through selling bonds.
The deal will need the approval of shareholders for both companies and regulators.
If Reckitt Benckiser shareholders reject the deal, the company will pay Mead Johnson $480 million.
Nurofen maker, Reckitt Benckiser, has been hit with an increased fine of A$6 million ($4.4 million) for misleading customers in Australia.
In 2015, Australia’s Federal Court ruled that products marketed as targeting specific pains, such as migraines, were actually identical.
The British company was fined A$1.7 million in April 2016, but Australia’s consumer watchdog argued the sum was too low.
On December 16, the court agreed to increase the penalty, saying: “The objective of any penalty in this case must be to ensure that Reckitt Benckiser and other <<would-be wrongdoers>> think twice and decide not to act against the strong public interest.”
Reckitt Benckiser was also ordered to pay the Australian Competition and Consumer Commission’s (ACCC) legal costs.
The ACCC said the pharmaceutical giant had profited substantially from misleading customers on products including Nurofen Back Pain, Nurofen Period Pain, Nurofen Migraine Pain and Nurofen Tension Headache.
ACCC Chairman Rod Sims said: “This is the highest corporate penalty awarded for misleading conduct under the Australian Consumer Law.
“The ACCC welcomes this decision, having originally submitted that a penalty of $6 million or higher was appropriate given the longstanding and widespread nature of the conduct, and the substantial sales and profit that was made.”
In April, the court ruled that Reckitt Benckiser had contravened Australian consumer law by saying its Nurofen Specific Pain products were each formulated to treat a specific type of pain.
Each product contained the same active ingredient, ibuprofen lysine 342mg.
Reckitt Benckiser said: “Nurofen did not intend to mislead consumers, however we recognise that we could have done more to assist our consumers in navigating the Nurofen Specific Pain Range.”
Earlier this year, the company removed a TV advert for one of its products – Nurofen Express. The advert had implied that the capsules directly targeted muscles in the head.
Reckitt Benckiser has said it will not re-broadcast it, following complaints that the ad was misleading.
Australia has ordered Reckitt Benckiser to take the Nurofen pain relief range off the Australian shelves after a court said UK-based drug giant misled consumers.
The court said products marketed to treat specific pains, such as migraines, were identical to one another.
Research also found the products were sold for almost double the price of Nurofen’s standard product.
Reckitt Benckiser said the case related only to Australia.
It said the ruling would not be applicable in other countries.
Reckitt Benckiser said it would comply with the Australian court order and that it “did not set out to mislead consumers”.
Australia’s consumer watchdog brought the matter to court earlier this year.
The Federal Court of Australia said the products must be taken off Australian shelves within three months.
The products affected by the order include Nurofen Back Pain, Nurofen Period Pain, Nurofen Migraine Pain and Nurofen Tension Headache.
The retail price for each of the pain-specific products was also found to be “significantly higher than that of other comparable analgesic products which also act as general pain relievers,” the Australian Competition and Consumer Commission (ACC) said.
The ACC said the court had found each product “was formulated to treat a particular type of pain; and solely or specifically treated a particular type of pain” – but that each product contained the same active ingredient, ibuprofen lysine 342mg.
However, the products were found to be “no more effective at treating the type of pain described on its packaging than any of the other Nurofen specific pain products.”
Reckitt Benckiser is a consumer goods manufacturer and makes products including Nurofen, Dettol and Harpic, among others.
The company has been ordered to publish correction notices in newspapers and on its website and to pay the ACCC’s court costs.
Several packs of Nurofen Plus were found to contain Seroquel XL, a powerful anti-psychotic drug used to treat schizophrenia, on Thursday.
Friday, after a safety alert was issued, pharmacists have been told to check each package of Nurofen Plus to look for anti-psychotic drugs after sabotaged packs were found in Boots stores across London the day before.
Nurofen Plus packages containing Seroquel XL blisters have been found in Boots stores in Victoria, Beckenham and Bromley.
Several packs of Nurofen Plus were found to contain Seroquel XL in pharmacies accross London
It is speculated that militant activists for animal protection carried out the sabotage operation with the intention of damaging Nurofen Plus’s producer, Reckitt Benckiser.
The pharmaceutical company may have been targeted because it tests some products on animals, although not Nurofen Plus.
Reckitt Benckiser said Friday that it didn’t know where the drugs had been switched.
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Nurofen Plus packages containing Seroquel XL blisters have been found in Boots stores in Victoria, Beckenham and Bromley.
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Boots’ spokeswoman told the Evening Standard:
“We are working closely with the MHRA to aid investigations and we have communicated with our stores and asked our pharmacists to be extra vigilant by checking the Nurofen Plus packet before selling it.”
The “sabotaged” Nurofen Plus packs – containing a total of 500,000 tablets – have been sent to pharmacies across the UK.
It is suspected that blister strips containing the tablets have been changed while in a wholesalers’ warehouse.
On Thursday, 3 tampered Nurofen Plus packs were discovered in south London, and an immediate investigation is under way to identify whether a group or an activist acting alone was behind the action of changing blisters.
Siân Boisseau, director of Virgo Health, the PR company which represents Nurofen, told the Mail:
“There has been a suggestion that the packets were deliberately put in the wrong boxes.
It was not discovered until the packets arrived in store. It was not in the manufacturing process or supply chain. It is not a mix-up and is still being investigated.”
A Virgo Health spokesman added police were not involved so far but could be in the future.
Patients who accidentally take the antipsychotic Seroquel XL may experience sleepiness and are advised not to operate any tools or machinery until they know how the tablets have affected them.
AstraZeneca, producer of Seroquel, said those who had mistakenly taken the drug should contact their GP and bring the blisters back to the pharmacy where they bought it.
Seroquel XL side effects include dizziness, headache and sleepiness, which affect more than one in ten users.
[googlead tip=”lista_mare” aliniat=”stanga”]Nurofen Plus and Seroquel XL are packaged differently – the blisters containing large capsules of Seroquel XL 50mg tablets have gold and black packaging while the Nurofen Plus pills are smaller and have silver and black packaging.
The Medicines and Healthcare Products Regulatory Agency (MHRA) has asked pharmacists to check 32-tablet packs of Nurofen Plus, which is sold only in pharmacies.
There are three batches of Nurofen Plus which were affected by the alert.
They are: batch number 13JJ, expiry date 03/2014, licence number 00327/0082; 57JJ, 05/2014, 00063/0376, and 49JJ, 05/2014, 00063/0376.
Each batch contains 4,000 -7,500 packages, amounting to around 500,000 tablets.
It said that not all packs are affected.
Ian Holloway, from the MHRA’s defective medicines report centre, said:
“People should check to see if they have any affected packets of Nurofen Plus. If you do, return them to the pharmacy where you bought them from.”
Reckitt Benckiser said “serious investigations” were under way to establish how and who switched the blisters, especially as Seroquel XL is manufactured by a different pharmaceutical company.
Reckitt Benckiser added:
“After careful review of the manufacturing system, manufacturing errors by the makers of Nurofen Plus or Seroquel XL are not thought to be part of the cause at this stage.
We are taking this matter very seriously and are working closely with the regulatory authority, the MHRA, and pharmacies. The MHRA are investigating the issue, and have considerable law enforcement powers.
Nurofen Plus is not available for self-selection from the shop floor – and therefore pharmacists are able to check packs and greatly reduce the likelihood of affected packs being sold.”
Dr. Aomesh Bhatt, medical director for Nurofen Plus, said:
“We are taking this matter extremely seriously and we are working closely with the MHRA.
Additionally, we are in the process of working to ensure the Nurofen Plus packs are double-checked by pharmacy staff before they are handed to customers.
We encourage consumers of Nurofen Plus to be vigilant and, while it is very unlikely, should they find they have a suspect pack or if they have any other concerns, we advise them to speak to the pharmacist where they purchased the product.”
Dr. Bhatt added that Nurofen Plus had a “firm policy” of not testing on animals.
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