Danone, Mead Johnson team up against Nestle for Pfizer's $10-bn infant nutrition

The second round of auction for Pfizer's $10-billion infant nutrition business will see a consortium comprising of French dairy major Groupe Danone (BN) SA and US paediatric nutrition giant Mead Johnson pitted against Nestle for the world's second-largest infant nutrition business.

The two-horse race became possible after Danone and Mead Johnson got Pfizer's approval to jointly bid in the second round of auction scheduled for 5 March, according to Reuters.

Along with the European giants Nestle and Dannone, Illinois-based Mead Johnson and Pittsburgh, Pennsylvania-based ketchup king H J Heinz Company have also entered the second round of auction for Pfizer's infant nutrition.

But Heinz signalled its retreat, when its CEO, William Johnson, this week said at the Consumer Analyst Group conference in New York that it would invest more in condiments and sauces rather than ''bet the ranch'' on a big deal.

Johnson said that investing in a huge transaction such as this, would not create enough value for the company or shareholders and rather invest in other areas that would create synergies or growth.

Pfizer acquired the infant-nutrition division in its $68-billion takeover of Wyeth in 2009, and since early July 2011, has been exploring alternative options, including, a full or partial spin-off or sale of its Nutrition and Animal Health business, in order to focus on its core biopharmaceutical products.