Just after the Spring Festival holiday, a news report about Durex's parent company planning to take over baby food company Mead Johnson for $16.7 billion was like a bombshell in the dairy industry.
Durex since the introduction of cow cow mulberry, if you don't know...
Affected by this news, Mead Johnson's stock price rose 21.41% on the day. The sources pointed out that although there is no guarantee that the transaction will eventually come to fruition, the two sides are "very close" to reaching a deal.
If I sum up this acquisition in one sentence: those who can't kill me will definitely make me stronger!
Just kidding, if you think the acquirer is just selling condoms, it's still young too simple...
Where is Durex's parent company sacred?
According to public information, Durex's parent company, Reckitt Benckiser Group, born in 1823 and headquartered in the United Kingdom, is an international giant producing fast-moving consumer goods for health, hygiene and home care, with a total market value of about $56 billion. In addition to Durex, there are many brands, such as these:
The acquirer, Mead Johnson, is an American infant food manufacturer, the world's third largest baby food manufacturer, accounting for about 10% of the global baby food market, second only to Nestlé and Danone, in 2012 and 13 is the largest market share of China's dairy industry.
2015 China Infant Milk Powder Top Ten Brands Ranking List
(Source: National Business Information Center, China Commercial Industry Research Institute)
From this point of view, although Mead Johnson's business has declined in recent years, it is still a hegemon in the Chinese milk powder market. Based on this, if Mead Johnson has the help of Reckitt Benckiser, it may be able to gain more market share from its peers, including Hong Kong milk powder companies.
What are the cross-border acquisitions?
1. The overall profit of the parent company declined
Judging from the latest financial report of Reckitt Benckiser, the overall performance growth of the Group is not satisfactory. In the first half of 2016, its net profit was £528 million, down 26% year-on-year. Although Reckitt Benckiser entered the Chinese market as early as 1995, it has been in the predicament of localization. Under the development of many years, its more well-known brands in China are only Durex, Skillful Hand, and Dilu.
For more than two decades, in addition to the condom business, other perennial losses. Durex's market has hit the ceiling, and for Reckitt Benckiser, it is clear that the condom business has a limited contribution to performance.
2. Changes in population policy
2017 is the second year of the implementation of the "comprehensive two-child" policy, is the fourth year of the "single two-child" policy, China's birth population has increased significantly, the proportion of two children and above has increased significantly, the policy effect has initially emerged, it is expected that from 2017 to 2018, newborns will still maintain a growth rate of about 8%, with an average annual growth rate of more than 1.5 million people, and the demand for milk powder cannot be described as unstable.
3, the industry reshuffle, the future can be expected
The new policy on formula milk powder, which has been called "the strictest in history" by the industry, was implemented on October 1, 2016. The registration and management of infant formula milk powder products will help to improve the entry threshold of the infant formula milk powder industry, the formula and brand chaos will be greatly improved, the brand concentration will be further improved, and leading enterprises can share the remaining market after the withdrawal of small and medium-sized enterprises.
In the context of the increasingly tight domestic popular foreign milk powder brands, due to the decline in global milk production, the current international milk prices have rebounded in an all-round way, and the demand from the United States and Europe is steadily rising, but the increase in production often takes a period of time, and this lag will cause dairy prices to continue to rise in the future.
So, if the acquisition is reached and the all-staff strategy is rolled out, one day if you forget to use my Durex, it may require my Mead Johnson.
Either way, you can be our customer.
Niu Niu Sang Friendship Tips:
It's almost Valentine's Day, and it's time to choose the order of use of products (manual smile face)
If you don't forward it, I'll just look at you like that...