Reckitt Benckiser has won the bid to acquire Schiff Nutrition in a $1.4bn (£877m) deal which will allow Reckitt Benckiser to launch itself in the $30bn vitamins and nutrition supplements market.
Reckitt Benckiser outdid German drugmaker Bayer which had pitched a $1.2bn (£750m) deal for Schiff Nutrition. Schiff’s board approved the offer of $42 (£26.3) a share in cash and will recommend its investors tender their shares. The higher bid by Reckitt Benckiser foiled Bayer chief executive’s Marijn Dekkers’s attempt to add faster-growing vitamins and supplements to Bayer’s consumer-health unit.
The Reckitt Benckiser-Schiff Nutrition deal will catapult the company into the higher–margin health business, enabling it to work on its US healthcare business, where it already sells brands such as Durex.
Reckitt Benckiser first made the $42–per–share (£26.2) cash tender offer this month, representing a 23.5% premium over the $34 per share that Bayer agreed to pay in late October. Bayer withdrew from the bid stating that it did not want to engage in a bidding war with the company.
The Reckitt Benckiser-Schiff Nutrition deal, subject to shareholder approval, will be financed with cash and existing credit facilities. Reckitt Benckiser added that it expected to complete the deal by the end of the year.
The purchase of Schiff Nutrition will be another feather in the cap for Reckitt Benckiser after a spat of acquisitions since 2006, including Adams Respiratory Therapeutics Inc. and SSL International Plc, the maker of Scholl foot products.
Schiff rose 0.1% to $41.90 (£26.2) at the close in New York yesterday. Reckitt Benckiser’s current share price is 3863.62p, up 18.62p.