The price that Nestlé is paying for Pfizer’s infant nutrition business puts a high value on emerging markets.

The Swiss foods group announced on Monday it would pay the American drugs company $11.85bn for Pfizer Nutrition – the maker of Promil, SMA and S-26 Gold baby food brands, with 85 per cent of its sales in emerging markets.

That’s substantially more than the $10bn mooted last week. But Nestlé was clearly driven into making a bigger offer than it originally intended to see off a rival bid from France’s Danone. Nestlé’s shares were flat on Monday (after going ex-dividend), Pfizer‘s up 1 per cent, and Danone‘s up over 2 per cent. That suggests Nestlé shareholders may be a little concerned about the price – but have no real worries about the EM-focused strategy. Continue reading »