What made Nestle’s offer at the time most attractive to Pfizer, compared with offers from Danone, was its unconditionality, where they decided to take the risks surrounding any forced disposals due to antitrust issues.
The combination of both infant formula businesses will result in Nestle having dominant market positions in up to ten countries, including Saudi Arabia, South Africa, Chile, Phillippines, Mexico, Hong Kong, Venezula, Colombia, Eqypt and perhaps Britain.
Nestle are likely to be forced to re-sell parts of the Pfizer’s business if the merger is given the green light.
This deal has implications for Irish dairy farmers, as it includes Pfizer’s infant formula plant in Askeaton, Co Limerick.
This plant, set up in 1974, produces over 48,000 tonnes of powder infant formula annually and uses 21% of Ireland’s total lactose production and 8% of Ireland’s skim milk powder in addition to whey protein concentrate.
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