Nestle, Fresenius among four others eying Danone’s Medical Nutrition unit
21 Mar 2014
Swiss food giant Nestle and German healthcare company Fresenius are among the four others that are eying the Medical Nutrition unit of France's Danone, daily Les Echos yesterday reported, citing unidentified sources.
Other interested in the unit are Nordic investment fund EQT and an unnamed industrial company, the report said.
Reuters had last month reported that Danone is planning to sell its Medical Nutrition business, which could fetch the French diary major over €3 billion ($4.08 billion). (See: Danone eyes sale of medical nutrition business worth €3 bn)
Danone has hired JPMorgan to find a buyer for the unit, which had sales of €1.34 billion, Reuters said.
Its Medical Nutrition business has an operating profit margin of 18.16 per cent, the second-highest after Danone's infant nutrition business.
Danone operates in two fields of medical nutrition – fortified products to counter malnutrition, eating difficulties and deficiencies, and targeted medical nutrition for people suffering from allergies or undergoing medical treatment.
Its best selling products are Fortimel – a paediatric nutrition product administered orally or through a feeding tube; Infatrini – a range of concentrated nutritional supplements, and; Neocate – a hypo-allergenic product for children.
Nearly 72 per cent of its sales are generated from Europe, while the rest comes from emerging markets.
Danone, a Fortune 500 company with 2012 revenues of over €28 billion, is one of the world's most successful health food companies. The world's largest yogurt maker has recently been making disinvestments in Europe and huge acquisitions in emerging markets like Russia, China and India.
Emerging markets now account for 49 per cent of the company's sales, while North America contributes 10 per cent, France and Russia account for 11 per cent each.
Medical nutrition is one of Nestle's growth-drivers and the Vevey-based company has recently gone on an acquisition spree or formed joint ventures in the US, the UK and China.
Last year it acquired US medical foods company Pamlab Inc, Prometheus Laboratories, a US firm specialising in diagnostics and licensed speciality pharmaceuticals in GI and oncology; Vitaflo, a provider of clinical nutritional solutions for infants, children and adults with genetic disorders; a minority stake in US firm Accera, specialising in medical foods for Alzheimer patients and UK-based CM&D Pharma, which makes a chewing gum for kidney patients.
Nestle Health Science, which already has a presence in acute disease sectors of ageing medical care, critical care and surgery, and paediatric medical care, formed a joint venture last year with Hong Kong billionaire Li Ka-shing-controlled pharmaceutical and healthcare firm Hutchison China Meditech (Chi-Med), to develop gastro-intestinal treatments based on traditional Chinese medicines.
Fresenius is a diversified medical equipment company that provides products and services for dialysis, hospitals as well as inpatient and outpatient medical care.
It also owns Fresenius Medical Care, the world's largest dialysis company, focuses on hospital management as well as on engineering and services for medical centres and other health care facilities.
