Reckitt Benckiser chases £13bn takeover of Mead Johnson Nutrition 

CONSUMER products giant Reckitt Benckiser is poised to move into the baby milk market after lining up a £13.3billion takeover of American group Mead Johnson Nutrition.

The FTSE 100 company behind Durex, Nurofen, Scholl and Air Wick surprised the City as it announced it is in advanced talks to buy Mead, which was spun out of drugmaker Bristol-Myers Squibb in 2009 and whose brands include Enfamil and Sustagen.

Analysts had been expecting it to make acquisitions in the consumer health market. Reckitt’s shares jumped 279p to 7109p due to its track record with previous takeovers and as the proposed deal opened up higher growth opportunities in markets such as China and Latin America.

The market value of Mead, number two player in the infant formula market behind Nestlé, soared by about a quarter.

Reckitt, led by chief executive, Rakesh Kapoor, said it expects to fund a deal through a combination of cash and debt and retaining a healthy credit rating.

But it added: “There is no certainty that any transaction will ultimately be agreed, nor as to the terms on which any transaction might occur.”

Reckitt is looking to get back on the front foot after a slowdown in sales growth amid a boycott of its products in South Korea, following the deaths of dozens of people who were exposed to a toxic disinfectant.