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A-Brands

Reckitt Weighs Shelving Infant Nutrition Unit Sale: Report

Britain's Reckitt Benckiser Group is considering if it should shelve the sale of its infant nutrition unit, as high-profile deals fall victim to a worsening financing market, according to a Bloomberg News report.

Talks between the Enfamil baby formula maker and potential buyers have stalled in recent weeks, the report said, citing people familiar with the matter.

Reckitt declined to comment on the report.

Challenges

Bloomberg News reported that disagreements over valuation, a lack of available funding and an ongoing baby formula crisis in the US complicated efforts to sell the business.

The US baby formula crisis had boosted profits at Reckitt and helped it grab the top spot in a $5.8 billion-a-year market.

Reckitt has not made a final decision on whether to formally pull the sale, the report said.

In February of this year, Bloomberg News reported that Reckitt Benckiser is considering options for its infant nutrition business, including a potential sale.

Baby Formula Crisis

Global companies that make baby formula are bringing products into the United States after the country's health regulator relaxed its import policy to address a nationwide shortage partly triggered by Abbott Laboratories' manufacturing plant in Michigan recalling some products in February.

Importers include Neocate maker Danone SA, while New Zealand's dairy giants Fonterra and a2 Milk have submitted applications to the US Food and Drug Administration (FDA) for supplying baby formula to the United States.

Once the products arrive in the country and receive a sign-off from the FDA, the manufacturers will distribute them through their existing supply chains and cater to unfulfilled orders, a spokesperson for the US Department of Health and Human Services said.

News by Reuters, edited by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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