Bristol-Myers seeks bidders for Mead Johnson
Bristol-Myers seeks bidders for Mead Johnson
Bristol-Myers Squibb is quietly sounding out potential bidders for a possible sale of Mead Johnson, its baby formula business, which is valued at between $7bn and $9bn.
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“BMS has made informal approaches, but it has not yet started a sales process,” they added.
It comes less than three months after BMS said it would conduct a strategic review of both its nutritionals business and ConvaTec, the wound care products supplier it owns, to focus on becoming a global biopharmaceutical company.
BMS declined to comment on the sale, but said it “continued to evaluate its strategic options with Mead Johnson and Convatec”. The company could also decide to spin off the units to shareholders, or do nothing.
Under Jim Cornelius, its new chief executive, BMS’s strategy is to shrink down into a focused maker of speciality pharmaceuticals.
Morgan Stanley and Citi, which have been mandated to auction ConvaTec, are understood to have extended the deadline for second round bids to June, after failing to attract enough interested bidders. So far, 3M, the diversified technology company which also has a healthcare business including wound care, has emerged as one of the strongest bidders.
For such consumer groups as Nestlé and Danone, acquiring Mead Johnson would cement their positions in the infant formula market.
Last year, Nestlé spent $5.5bn to acquire Gerber, the baby foods business, from Novartis, the Swiss pharmaceutical company; while Danone bought Numico, the Dutch maker of baby food, for $16.8bn.
Mead Johnson is best known for its Enfamil and Enfalac range of infant formula.
The division employs about 5,000 people globally and manufactures and markets more than 70 products in more than 50 countries.
BMS has already announced plans to cut costs by $1.5bn by 2010, including cutting 10 per cent of its workforce and closing more than half of its manufacturing plants. In January, BMS sold its Medical Imaging business to Avista Capital Partners, for $525m.
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