The biggest acquisition ever made by Dettol maker Reckitt Benckiser (RB.) has been called "an inflection point" in its history by chief executive Rakesh Kapoor. The $16.6bn (£13.3bn) Mead Johnson deal will almost double its presence in consumer health and ramp up its exposure to emerging markets, particularly China.
The company brought forward its results to accompany the announcement of the agreed purchase (subject to shareholder and regulatory approval) of the US-based infant formula business, the total cost of which will be nearly $18bn once Mead's debt is factored in. The deal essentially means Reckitt is entering a new category, but management claimed it was a "natural extension" to its consumer health portfolio, which was "already trusted by millions of mothers". Mead's sales fell in 2015 and 2016, but Reckitt said this was mostly due to ongoing regulatory changes in the infant formula milk market in China which will ultimately benefit the company.