Reckitt Benckiser has agreed to buy US infant formula maker Mead Johnson Nutrition for $16.6 billion, its biggest deal ever and opening up a new market area for the British consumer goods company.
Reckitt, the British maker of Lysol cleaners and Durex condoms, said it will pay $90 a share for the company.
This is a 30% premium to the stock's closing price the day before Reckitt said last week it was in talks to buy Mead Johnson.
Including Mead Johnson's debt, the deal is worth $17.9 billion.
Reckitt said its goal is for the Mead Johnson business to perform at the upper end of estimated category growth of 3-5% a year in the medium to long term.
It estimated £200m in annual cost savings by the end of the third full year, and will add to earnings in the first full year. It should add a double-digit percentage rate to earnings by the third year, Reckitt said.
Reckitt also reported fourth-quarter revenue of £2.76 billion, up 1% on a like-for-like basis. For the full year, like-for-like revenue rose 3%.
