UMER products group Reckitt Benckiser is to acquire Schiff Nutrition for $1.4bn (£878m).
The board of Schiff Nutrition, which sells vitamins, nutrition supplements and nutrition bars, has approved the transaction at $42 a share and recommended shareholders agree the deal.
The FTSE 100 consumer group will finance the deal using cash and existing credit facilities.
The deal brings Reckitt Benckiser – behind Cillit Bang cleaner and Durex condoms – a new portfolio in the vitamins market including MegaRed for heart care and Tiger’s Milk nutrition bars.
US-based Schiff Nutrition won over Germany’s Bayer, which said earlier this week it would not increase its $1.2bn offer.
The global vitamins and supplements market is worth $30bn, Reckitt Benckiser chief executive Rakesh Kapoor said yesterday, adding that the acquisition is an “excellent fit” with its current portfolio.
“The integration process will be undertaken promptly following completion of the transaction, so that the business can continue its growth trajectory with minimum disruption and realise synergies as soon as possible,” Kapoor added.
The tender offer is expected to close before the end of the year. Morgan Stanley acted as the sole financial adviser to Reckitt Benckiser.
Darren Shirley, analyst at Shore Capital, said yesterday that the deal made “strategic and financial sense for Reckitt Benckiser”.
Shares were broadly flat in trading yesterday, closing up 0.39 per cent yesterday at 3,860.26p.