Mead Johnson Nutrition and SanCor Complete Joint Venture
The venture unites a global leader in infant formula and pediatric nutrition with the leading dairy producer in Argentina for the benefit of infants and children across the region.
Mar 16 2012 --- Kasper Jakobsen, Mead Johnson Nutrition's Chief Operating Officer and Oscar Carreras, Chairman of Board of Administration for SanCor Cooperativas Unidas Ltda. of Argentina, have met in Buenos Aires to officially establish a joint venture that will expand the availability of high-quality pediatric nutrition products across the Southern Cone of South America.
The venture unites a global leader in infant formula and pediatric nutrition with the leading dairy producer in Argentina for the benefit of infants and children across the region.
The new joint venture will develop, produce and market innovative pediatric nutritional products under the SanCor Bebe brand, which holds the leading position in the Argentine market. The business and the brand will benefit from the potent combination of the two companies' expertise. Mead Johnson will provide clinical research, proprietary formulas and product innovation excellence, while SanCor will contribute its deep local market knowledge and high-quality manufacturing capabilities.
"Everybody wins with this transaction. Mead Johnson strengthens its presence and growth potential in South America, while SanCor is able to better leverage its outstanding manufacturing base and continue exploration of business opportunities in other promising categories," stated Oscar Carreras. "More importantly, parents win with greater access to best-in-class products they can feed their children with confidence."
Mead Johnson will invest 850 million Argentine pesos (approximately US$196 million*) for an 80 percent ownership interest in the joint venture. In 2011, SanCor's turnover in the infant formula and children's growing-up milk categories totaled nearly 300 million pesos (approximately US$69 million*).
"We appreciate SanCor's leadership. SanCor's manufacturing expertise is recognized globally and they have established Bebe as the number one brand in Argentina," commented Kasper Jakobsen. "We are excited about the potential for this venture to accelerate our growth in these key markets and to benefit local babies and children."
The joint venture will continue to produce its products at existing SanCor facilities in Argentina.
Beginning with first quarter 2012 reporting, Mead Johnson will consolidate the joint venture into its overall financial statements. The transaction is not expected to have any material impact on the company's 2012 earnings, as additional investment in the business, along with interest expense for the deal, will offset any first-year contribution from the venture.
