Nestle SA (NESN), the world’s largest food company, should rebrand products to get approval from South Africa’s antitrust authority for its planned takeover of Pfizer Inc. (PFE)’s baby nutrition division, the regulator recommended.
Nestle should license existing Pfizer infant formula products to be sold by a third party for 20 years under a different brand to avoid an increase in infant formula prices resulting from the merger, the country’s Competition Commission said in a statement today. The Vevey, Switzerland-based company will make its arguments tomorrow in a hearing before the Competition Tribunal, which will rule on the matter.
Competitors have told the commission the proposed deal raises “serious competition concerns,” the regulator said. Nestle would be able to reintroduce the Pfizer products under their original brands after the 20-year period, according to the commission’s recommendation.
Nestle is seeking international approval for the acquisition, which will give it access to more customers in developing nations such as China. Mexico’s antitrust regulator blocked the deal in its domestic market in November, forcing a divestment of assets in that market. Chinese and Australian officials cleared the transaction in their countries that same month.
“Nestle won’t oppose the conditions set out by the commission,” Ravi Pillay, a spokesman for Nestle South Africa, said by phone from Johannesburg.
To contact the reporter on this story: Jaco Visser in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: John Viljoen at email@example.com