Swiss food group Nestlé is to buy US drugmaker Pfizer’s baby food business for $11.85bn, beating out French rival Danone in the battle for dominance of fast-growing emerging markets.
The world’s biggest food company had to dig deeper than expected to win the high-stakes fight for Pfizer Nutrition, which makes 85 per cent of its sales in emerging markets and is Nestlé’s biggest deal to date.
“The price tag is high, however Nestlé is securing a high growth/margin business with high exposure in the emerging markets,” said Vontobel analyst Jean-Philippe Bertschy.
Nestlé said the deal would add to earnings per share from the first year, and would allow cost synergies of $160m.
Bertschy expects it to add about 0.5 per cent to earnings per share in the first year and 1.5 per cent in the following years.