Dutch food and nutrition group Royal Numico NV has today (Friday) announced that the Italian antitrust authority has approved Numico’s acquisition of Mellin SpA, Italy’s fastest growing baby food company.
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“We are very pleased with the positive outcome from the Italian antitrust authority which now ensures completion of this acquisition before the end of June,” said Numico CEO Jan Bennink. “The agreed reduction of consumer prices, which formed an integral part of our business plan, will help bolster growth in this very attractive market with low per capita consumption. We remain confident with the anticipated level of synergies which will allow the acquisition to be accretive from year one.”
Numico will acquire 100% of the share capital of Mellin for a total consideration of €400m (US$487m), which will be paid equally in cash and shares. The shares are subject to a lock-up period of 6 months. Associated transaction costs are expected to amount to €5m which will be taken in the second quarter of 2005 as part of the overall consideration.
In order to obtain a rapid clearance of the transaction, Numico has confirmed to the Italian antitrust authority that it will reduce the prices for Milupa and Mellin Stage 1 and Stage 2 infant milk formula as well as for some specific specialty formulas. This price reduction was already factored into the initial business plan that was made for the combined entity. The Italian antitrust authority preferred a formal commitment of Numico on this point in view of the current situation on the Italian market which is characterised by relatively high prices.
Marco Fossati, chairman and CEO of Findim and STAR, will join Numico’s supervisory board following completion.
