Pharma BD Deal Intelligence

Nestle SA / Novartis Medical Nutrition

2006 · Acquisition/Merger · $2.5B · Complete

CALLED IT — OFF BY 7

Became the seed asset for Nestlé Health Science, but no public evidence the $2.5B price paid off on its own economics; culture-clash integration was documented as a real, non-trivial problem.

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The coverage arc

Dec 14, 2006 NBC News / AP Neutral

Nestle agreed to buy Novartis Medical Nutrition for $2.5B, strengthening its #2 position behind Abbott in clinical nutrition and continuing its push into…

Dec 14, 2006 NutraIngredients Neutral

Nestle confirmed the US$2.5bn purchase of Novartis Medical Nutrition, covering oral and tube-delivery nutritional supplements for hospitals and nursing homes;…

Jul 02, 2007 NutraIngredients Bullish

Nestle completed the $2.5B acquisition on July 2, 2007 after EU regulatory review, elevating it to a 'very strong player in the strategic core category of…

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Nestle SA acquired Novartis Medical Nutrition for approximately $2.5 billion (announced December 2006, completed July 2007 following regulatory review), adding the Optifast, Boost and Resource clinical-nutrition brands — a unit generating roughly $950 million in annual sales — and making Nestle the world's number-two player in healthcare nutrition behind Abbott. The divestiture allowed Novartis to refocus on its core pharmaceuticals business. Note: this is a medical-nutrition transaction, borderline relative to core pharma.

Did it work? Outcome assessment

Became the seed asset for Nestlé Health Science, but no public evidence the $2.5B price paid off on its own economics; culture-clash integration was documented as a real, non-trivial problem.

Strategic verdict
Partially Achieved

Key facts

Related deals — scored

DealYearValueOutcome
Nestle SA / Novartis Medical Nutrition (this deal)2006$2.5B64
Nestle SA / Pfizer Nutrition (Pfizer Inc. infant nutrition unit)2012$11.8B50
Eli Lilly and Company / ICOS Corporation2006$2.3B87
Crucell N.V. / Berna Biotech AG2006$450M85
Lonza Group AG / Cambrex Bioproducts and Biopharma businesses2006$460M83
Reckitt Benckiser plc / Boots Healthcare International2006$3.4B82
Genentech, Inc. (Roche Group) / Tanox Inc.2006$919M80

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