EC extends deadline for Nestle-Novartis approval

By staff reporter

- Last updated on GMT

Related tags: Nestlé, Gerber products company

The European Commission has extended the deadline for its decision
on Nestle's proposed buy of Novartis' medical nutrition unit for
US$2.5bn to allow time for responses on proposed remedies to
competition issues.

Nestle announced the planned acquisition in December, after months of speculation that it was eyeing up the unit as a springboard from a minor player in the medical foods market to the world number two. The original deadline for the European Commission to complete its review of the plan was this Friday, June 15. But a mergers notification list disseminated today showed that the deadline has been extended to June 29. Reuters reported the explanation given by a commission official was that more time was needed for the companies' customers and competitors to respond to proposed ways of dealing with competitive problems that the deal would throw up. The precise nature of the competitive problems and the mooted solutions has not been communicated. Nestle seems to be positive that no unexpected hurdles will be thrown up. Chief spokesperson reportedly said that the delay was part of the normal process. In addition to bolstering Nestle's health and nutrition division - a major area of focus and investment - the deal comes with 2000 employees, whose expertise will boost Nestle's R&D capability. Peter Brabeck-Letmathe, chairman and CEO of Nestlé, said in December: "I am very pleased that this acquisition allows us to become a very strong player in the strategic core category of nutrition. … This is a very important step for the Nestlé Group in its strategic transformation process to a nutrition, health and wellness company as it strengthens the core of our globally managed Nestlé Nutrition business."​ Nestle has said that the unit is complementary to its existing healthcare nutrition activities, both in geographical spread and products. "The combination of both offers a product portfolio covering all disease specific cases where special nutrition is needed,"​ it said. Nestle is also acquiring Novartis' Gerber baby food brand for $5.5bn. This transaction, which also remains subject to regulatory approval, was announced in April.

Related topics: Manufacturers

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