Exclusive: Nestle and Fresenius home in on Danone Medical - sources

Fri Apr 4, 2014 9:17am EDT
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By Anjuli Davies and Andreas Kröner

LONDON/FRANKFURT (Reuters) - The field of bidders for Danone's Medical Nutrition business has narrowed to German healthcare group Fresenius and Swiss food company Nestle, two people familiar with the process told Reuters on Friday.

Talks over the business, which has been valued at 4 billion euros ($5.5 billion), would soon enter a decisive phase, they said.

Four groups including Nestle and Fresenius had previously shown interest in buying the business, French daily Les Echos said last month.

Reuters reported in February that Danone, the world's biggest yoghurt maker, was considering selling the business - which makes feeding tubes and foods and beverages for people with special nutritional needs - even though it has a profit margin above the group average.

The company is most likely to use the proceeds from a sale to fund an expansion of its faster-growing baby food and dairy businesses, targeting acquisitions in Asia and Africa, analysts say.

Danone, Nestle and Fresenius all declined to comment.

Nestle, owner of the Nespresso, KitKat, Perrier and Maggi brands, has bought outright the dermatology joint venture it had with L'Oreal and is already a big player in the medical nutrition market.

It has signaled it might move further into healthcare, where growth prospects and profit margins are more enticing than in its traditional food markets.   Continued...

A Nestle logo is pictured on a Milo tin in a showroom at the company headquarters in Vevey February 13, 2014. REUTERS/Denis Balibouse