Ulf Mark Schneider, the new chief executive of Nestle SA, is wasting no time in hunting out acquisitions.
The Swiss consumer group is considering a takeover of Mead Johnson Nutrition Co., the U.S. baby-formula producer, according to a report yesterday from StreetInsider.
But right now, Nestle’s sprawling portfolio needs pruning, not fresh additions. This looks like a deal it should skip.
There are some compelling reasons why it might make sense: Nestle is already the global leader in baby foods, while Mead Johnson is number three. Putting them together would create a powerful force in this market. What’s more, over half of Mead Johnson’s operating income comes from Asia, which has greater growth potential.