Firms act on Reckitt Benckiser’s $23.3bn buy of Mead John Johnson Nutrition

RB expects to see a double-digit percentage earnings-per-share boost after the deal is closed

Firms act on Reckitt Benckiser’s $23.3bn buy of Mead John Johnson Nutrition

Three firms are advising on the blockbuster $23.3bn acquisition of Mead Johnson Nutrition (MJN) by Reckitt Benckiser (RB).

Davis Polk & Wardwell has confirmed it is advising RB in the transaction, while the London-headquartered RB has also confirmed that City-based firm Linklaters is also a legal adviser. Meanwhile, Kirkland & Ellis is advising MJN in the deal.

RB has agreed to pay about $117 per MJN common stock, a premium of 29% over the MJN closing price on 1 February, in a transaction with total enterprise value of about $23.3bn, including MJN’s approximately $1.56bn in net debt. This is 17 times 2016 non-GAAP EBITDA. The deal is expected to boost RB’s earnings per share by a double-digit percentage. It is also expected to result in about $325m in annual savings for RB.

Subject to customary conditions and approvals, the deal is already unanimously approved by MJN’s board. Before its expected close in the third quarter of the year, the deal would need approval from regulatory authorities and the shareholders of both firms.

 

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