The board of French food maker Danone SA meet on Thursday, Dec. 11, to discuss offers for its medical nutrition business after receiving bid proposals that reportedly value the business at more than €3 billion ($3.7 billion).
Danone's board is yet to decide if it will engage with bidders and may opt to hold onto a unit that is not considered to be core to its operations but is fast growing and highly profitable, a source familiar with the matter said.
Paris-based Danone has been pondering a sale of the business, which makes food for people on restricted diets due to illness, since at least February. It has attracted takeover proposals from Lake Forest, Ill.-based Hospira Inc. and a consortium led by Germany's Fresenius SE & Co KGaA that includes Permira and PAI Partners SAS, the source said. Danone also held talks with Nestlé SA though the Swiss food giant is understood not to have made an offer.
Hospira in July was reported to be considering a bid of about $5 billion for the unit, though the bids currently on the table are closer to $4 billion, according to a Bloomberg report. The Fresenius consortium late last month considered pulling out of the bidding for the unit due to frustration at the sales slow progress.
Danone acquired the bulk of its medical nutrition business in 2007 as part of its €12.3 billion purchase of Dutch baby food maker Royal Numico NV. A sale would help Danone refocus its business on its core dairy, baby food and water operations and could provide cash for acquisitions. Glenview, Ill.-headquartered Mead Johnson Nutrition Co. has been widely tipped as a target and would enable Danone to quickly expand its baby food operations in the U.S.