Conditions still to be met for Wyeth purchase, says Nestle

Nestle SA, the world’s largest food company by revenue, said on Monday that acquiring Wyeth still needs to meet other conditions after media reported the deal has been approved by the Chinese government.

In April, Nestle announced it would buy US drug maker Pfizer’s infant nutrition business for $11.85 billion.

“The acquisition is still subject to other closing conditions. We therefore do not make any further comment at this stage,” said He Tong, public relations director of Nestle China, told China Daily.

Dow Jones Newswires quoted Nestle chief executive Paul Bulcke on Friday as saying: “Although other approval is still necessary, China is a ‘big one’. It’s a very important approval. I am very positive.”

The purchase is set to make Nestle the holder of the largest share in the Chinese market for infant formula, surpassing Mead Johnson and Co LLC, Dumex — a part of Groupe Danone — and other rivals, industry analysts said.

As recently as July 2010 the industry research company CIConsulting had reported that Dumex held the largest portion of the Chinese formula market, taking up 16.7 percent, followed by Mead Johnson, with 12 percent, and Nestle, with 10.5 percent.

“Nestle has been active in recent mergers in emerging markets,” said Gong Bo, an industry analyst at Beijing United Innovation Capital Ltd. “This new investment, which comes after a recent series of acquisitions, is meant to secure its high growth margin in the fast- growing market.”