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“Now that’s a hedge”: The maker of Durex condoms is getting into the baby formula business

A baby is fed a milk with a nursing bottle on a stroller at a shopping mall in Beijing, China, Wednesday, Aug. 7, 2013. China announced Wednesday it has fined six milk suppliers, including Mead Johnson and New Zealand's Fonterra, a total of $108 million for price-fixing after an investigation that shook the country's fast-growing dairy market. (AP Photo/Andy Wong)
AP Photo/Andy Wong
Sweet deal.
By April Siese
Published Last updated This article is more than 2 years old.

The Reckitt Benckiser Group agreed to buy the Mead Johnson Nutrition Co. for $16.6 billion. It’s one of the more boring-sounding corporate deals in recent memory, until you get past the clunky company names and consider what’s actually happening.

Reckitt Benckiser CEO Rakesh Kapoor sees a lot of good reasons for the UK company to get into the market for infant formula (Mead Johnson’s brands include Enfamil and Enfagrow). Among them are China’s decision to change the one-child policy, which has increased the country’s birth rates, along with urbanization and an influx of women entering the workforce in developing economies, all of which should boost demand for store-bought nutrition products.

At Reckitt Benckiser, Glenview, Illinois-based Mead—a spinoff of Bristol-Myers Squibb —will join a wide-ranging lineup of brands that includes Lysol cleaning supplies, French’s mustard, Mucinex cold medicine, and, yes, Durex condoms, the latter of which Reckitt acquired in 2010.

Students of business-merger history might remember a similarly hedgy-looking move in 2000 by another consumer products giant, Unilever, which announced its purchase of Ben & Jerry’s ice cream and Slim-Fast diet shakes on the very same day.

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