French food group Danone has offered $16.7 billion (12.3 billion euros) for Dutch baby-food maker Royal Numico. The all-cash offer of 55 euros a share is expected to create what Danone claims will be the world’s largest food firm.
Under the takeover, Danone will gain control of baby food brands Cow & Gate, Milupa and Nutricia, which hold around 40 per cent share of the European market.
The news comes a week after Danone said it was in talks to sell its biscuit unit to Kraft Foods, for 5.3 billion euros. “Last week I sold a business, this week I bought a business. I don’t know what I am going to do next week,” commented Danone’s Chief Executive Franck Riboud.
“I think it is a fair price for a unique company and a unique combination,” Riboud added. Analysts have suggested the French firm’s bid for Nutricia is part of an effort to repel any prospective takeover offers. According to weekend press speculation, New York-based PepsiCo is considering making an approach for the French group.
A definitive agreement on the deal is expected to be reached within weeks.