Numico underlined its interest in acquisitions at the end of last year as it reported good growth in its core businesses, baby foods and clinical nutrition, and showed a desire to aggressively expand after getting rid of its supplement businesses.
With improvements to its debt, the company now says it could easily raise up to €500 million to fund takeovers, according to the Financial Times.
Danone is the leader in the French baby food market and major player Nestlé would be unlikely to gain approval from the competition authorities for such a purchase.
Numico is also looking to expand in China and Russia, according to reports.
Swiss food company Hero is also looking at emerging markets such as North Africa, the Middle East and Central Asia, and recently bought baby food brands from Wander to give it access to new markets.
Numico reported last week that baby food sales had climbed 5.6 per cent over 2003 and earnings were up 6.8 per cent. Clinical Nutrition has also seen strong growth, with net sales up 10 per cent on the previous year.