Danone to acquire baby food maker Numico for $14.5 billion

10 July 2007

Mumbai: Groupe Danone of France have agreed to acquire Netherlands food group Royal Numico NV, Europe''s largest baby-food maker, for 10.6 billion euros ($14.5 billion) in cash.

In a joint statement, Danone said it was offering €55 euros ($75) a share, which is a 44 per cent premium over the company''s average share price over the last three months. Numico said the offer was "a very attractive proposition for all of our stakeholders." Numico has a market capitalization of about €8.5 billion ($11.6 billion).

The deal, backed unanimously by both boards, is expected to reach definitive agreement within the next few weeks, the companies said.

Meanwhile, trading in Numico shares on the Euronext were suspended after surging as much as 13 per cent on speculation about a takeover by PepsiCo Inc. or Groupe Danone SA. Euronext said the shares were halted pending a statement from Numico, which has a market value of €8.6 billion ($11.7 billion).

Pepsi, however, is not into the business of baby foods. The company''s international sales rose 14 per cent last year to $12.96 billion on demand for Lay''s chips, Pepsi soda and bottled water from Russia to China.

Food and beverage companies have been in deal-making mode lately, as some of the biggest players consider shuffling their assets. Cadbury-Schweppes is considering a sale of its drinks unit, and Coca-Cola has expressed interest in buying Cadbury''s Snapple iced-tea business.