Nestle Near Deal To Buy Pfizer Baby Food Business: Reports

Nestle chief executive Paul Bulcke presents the group's quarterly results on Oct. 20, 2011. Nestle is close to a deal to buy Pfizer's baby food business, according to reports.

Nestle might soon be be feeding a lot more babies.

The world's largest food and nutrition company is in final talks to buy Pfizer's infant nutrition business for between $9 and $10 billion, according to a report by Reuters. Deal talks were first reported on Tuesday by the Wall Street Journal.

The deal would give the Switzerland-based Nestle a major presence in Asia's baby food market, where Pfizer is a strong player, according to Jon Cox, analyst at the Swiss bank and brokerage firm Kepler Capital Markets. And Asia's market represents about half of the global infant nutrition business, Cox told The Huffington Post.

"So this is a deal for Nestle to strengthen its position," Cox said. "It would become the clear leader in Asia in this important market."

Neither Nestle nor Pfizer returned a request for comment.

According to Bloomberg, the French company Danone has also been vying for the Pfizer business.

The new deal, which could be finalized by the end of April, could give Nestle about 10 percent of the infant formula market in China, according to Bloomberg. And that's during a year when China is said to be expecting a sort of baby boom, with an estimated 5 percent increase in its birthrate, according to the BBC, which cites a December report by China's state-run Xinhua news agency.

The benefits of buying into China's baby-food market seem pretty clear for Nestle, then. So why would Pfizer be selling? Bloomberg noted that the company is trying to focus its energies on developing new drugs to make up for the money it's losing, now that it no longer has patent protection for its cholesterol drug Lipitor.

The deal will likely have little impact for American consumers of baby food and related products, according to Cox. Nestle already has a strong position in the U.S. market with its Gerber brand. But the deal highlights the importance of the baby food business worldwide.

"There's a lot of focus on babies and what they eat," he said. "It's a pretty hot topic."

Comments

[Claudia King]

02:20 AM on 04/26/2012

Many decades ago when I learned of Nestle's repeated refusal to stop marketing infant formula to African mothers who could not afford it, and so watered it down with mostly unsafe water (while their bodies stopped producing breast milk), I decided that, even if Nestle one day cleaned up its act, that I would never again knowingly purchase a Nestle product. This despicable low life corp. has not changed and will now be (if it is not already) marketing clean water to mothers whose babies are fed formula and need it. In poor countries (India is one) US soda pop corps buy/use the available water supply and reduce the supply/drive up the cost of water for the nation's population (and then sell them bottled water). I wish I believed in Hell, because there surely would be a hottest spot, without nourishment or water, set-aside for Nestle folk and their willfully ignorant investors. Instead, these despicable pampered humans continue to immiserate the earth and are held accountable to no one before or after their demise.

[sclavijo07]

01:21 PM on 04/20/2012

Well I still think that the best way for mother to feed there baby is by breatfeeding, not olny it benefits the baby but also the mother. For reduces obesity, cognitive development and a better health in chidhood and adulthood and for the mother it reduces bleeding, it strengthening of bones, and suppresses ovulation.

[RanaAurora]

08:36 PM on 04/18/2012

At what point are people going to stop letting large, unethical corporations start buying up as much of our resources and food as possible?

[sensimilla]

06:45 PM on 04/18/2012

nestle does NOT make food. They are destroying the health of humanity..

[cornel]

06:11 PM on 04/18/2012

Nestle the Swiss Food Consortium strikes again. How big will they become ? They are already capable of economically destroying a small country like Azerbaijan, that had to beg them to resume delivery ! I wonder how long it's going to take before they take over General Mills.