NESTLE, the world’s biggest food group, is closing in on a deal to buy Pfizer’s infant nutrition business for up to $10bn (£6.25bn) to boost its business in China and extend its lead in the world of formula milk for babies, sources familiar with the matter said yesterday.
“Nestle is in the lead position and is closing in on a deal which we expect soon,” said one source.
Another source said the business would fetch $9bn-$10bn and expected a deal by the end of April.
The Pfizer unit is a high-growth $2.1bn turnover business with over 70 per cent of sales in emerging markets and a key position in China, and has attracted the attention of the three largest players in the infant milk formula sector.
A spokesman for Vevey-based Nestle, which holds its annual general meeting in Lausanne today and releases first-quarter sales figures tomorrow, said “we never comment on market rumours”.
The Pfizer business, with its SMA Gold brand, ranks as world number five in the infant milk formula market – the world’s fastest growing packaged food category – after Nestle, Mead Johnson, Danone and Abbott Laboratories.
It is currently growing sales at eight per cent a year.
City A.M. Reporter