Mead Johnson Nutrition and SanCor Complete Joint Venture
March 15 2012 - 4:03PM
Business Wire
Kasper Jakobsen, Mead Johnson Nutrition’s Chief Operating
Officer (NYSE: MJN) and Oscar Carreras, Chairman of Board of
Administration for SanCor Cooperativas Unidas Ltda. of Argentina,
met today in Buenos Aires to officially establish a joint venture
that will expand the availability of high-quality pediatric
nutrition products across the Southern Cone of South America.
The venture unites a global leader in infant formula and
pediatric nutrition with the leading dairy producer in Argentina
for the benefit of infants and children across the region.
The new joint venture will develop, produce and market
innovative pediatric nutritional products under the SanCor Bebé
brand, which holds the leading position in the Argentine market.
The business and the brand will benefit from the potent combination
of the two companies’ expertise. Mead Johnson will provide clinical
research, proprietary formulas and product innovation excellence,
while SanCor will contribute its deep local market knowledge and
high-quality manufacturing capabilities.
“Everybody wins with this transaction. Mead Johnson strengthens
its presence and growth potential in South America, while SanCor is
able to better leverage its outstanding manufacturing base and
continue exploration of business opportunities in other promising
categories,” stated Oscar Carreras. “More importantly, parents win
with greater access to best-in-class products they can feed their
children with confidence.”
Mead Johnson will invest 850 million Argentine pesos
(approximately US$196 million*) for an 80 percent ownership
interest in the joint venture. In 2011, SanCor’s turnover in the
infant formula and children’s growing-up milk categories totaled
nearly 300 million pesos (approximately US$69 million*).
“We appreciate SanCor’s leadership. SanCor’s manufacturing
expertise is recognized globally and they have established Bebé as
the number one brand in Argentina,” commented Kasper Jakobsen. “We
are excited about the potential for this venture to accelerate our
growth in these key markets and to benefit local babies and
children.”
The joint venture will continue to produce its products at
existing SanCor facilities in Argentina.
Beginning with first quarter 2012 reporting, Mead Johnson will
consolidate the joint venture into its overall financial
statements. The transaction is not expected to have any material
impact on the company’s 2012 earnings, as additional investment in
the business, along with interest expense for the deal, will offset
any first-year contribution from the venture.
* at current exchange rates
Forward-Looking Statements
Certain statements in this news release are forward looking as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which are identified by words such as “expects,”
“intends” and “believes,” involve certain risks, uncertainties and
assumptions that may cause actual results to differ materially from
expectations as of the date of this news release. These risks
include, but are not limited to: (1) the ability to sustain brand
strength, particularly the Enfa family of brands; (2) the effect on
the company’s reputation of real or perceived quality issues; (3)
the adverse effect of commodity costs; (4) increased competition
from branded, private label, store and economy-branded products;
(5) the effect of an economic downturn on consumers’ purchasing
behavior and customers’ ability to pay for product; (6) inventory
reductions by customers; (7) the adverse effect of changes in
foreign currency exchange rates; (8) the effect of changes in
economic, political and social conditions in the markets where we
operate; (9) legislative, regulatory or judicial action that may
adversely affect the company’s ability to advertise its products or
maintain product margins; (10) the possibility of changes in the
Women, Infant and Children (WIC) program, or increases in levels of
participation in WIC; and (11) the ability to develop and market
new, innovative products. For additional information on these and
other factors, see the risk factors identified in the company’s
periodic reports, including the annual report on Form 10-K for
2010, quarterly reports on Form 10-Q and current reports on Form
8-K, filed with, or furnished to, the Securities and Exchange
Commission, available upon request or at meadjohnson.com. The
company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
About Mead Johnson
Mead Johnson, a global leader in pediatric nutrition, develops,
manufactures and distributes more than 70 products sold in over 50
markets worldwide. The company’s mission is to nourish the world’s
children for the best start in life. The Mead Johnson name has been
associated with science-based pediatric nutrition products over 100
years. The company’s “Enfa” family of brands, including Enfamil®
infant formula, is the world’s leading brand franchise in pediatric
nutrition. For more information on company, go to
www.meadjohnson.com.
About SanCor
SanCor is a 100% Argentinean dairy cooperative, with 73 years of
distinguished history. It processes one-eighth of the milk in the
entire country, and it is also the leader in dairy product exports.
SanCor products are well-known in Argentina and across Latin
America. For more information, go to www.sancor.com.
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