Danone CEO Rejects Prospect of Acquiring Mead Johnson Amid Legal Concerns

Danone's CEO, Antoine de Saint-Affrique, has firmly ruled out any interest in acquiring the Mead Johnson infant-formula business, currently owned by Reckitt Benckiser. Speaking at the dbAccess Global Consumer Conference, de Saint-Affrique highlighted the significant legal liabilities associated with Mead Johnson, which Reckitt Benckiser considers a non-core asset. The ongoing lawsuits in the United States concern the Enfamil brand and cases of necrotizing enterocolitis (NEC).

During the conference, when questioned about potential acquisitions in the US market, de Saint-Affrique responded negatively, emphasizing the unattractiveness of inheriting long-term liabilities. He stated, "Taking something that would bring us liabilities for the next 20 years is not something I will do for the company." Reckitt Benckiser has already been ordered to pay $60 million in damages in 2024 related to NEC cases, and additional lawsuits are pending.

While Danone is not interested in Mead Johnson, the company has faced its own challenges. A recall related to the cereulide toxin affected its infant-formula products earlier this year. Despite this, de Saint-Affrique assured that Danone's shelf presence has returned to normal and the impact on brand equity is minimal, with expectations of full normalization over time.

Additionally, de Saint-Affrique provided insights into the Chinese infant formula market during the conference. He noted that despite the market's value remaining around €20 billion ($23.28 billion) over the past decade, the number of births in China has significantly declined from 14 million to 8 million. This has been accompanied by a market consolidation, reducing the number of players from 1,000 to about 500, with the top three players now holding approximately 50% of the market share.