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Aspen to acquire Nestlé’s infant nutrition businesses in Africa and Australia

Nestlés southern African infant nutrition business spreads over South Africa, Botswana, Namibia, Lesotho, Swaziland and Zambia. (Image source: bunmun/Flickr)

South Africas Aspen Pharmacare has entered into an agreement with Nestlé to acquire its infant nutrition businesses in Africa and Australia for US$215mn

The acquisition will include certain rights to intellectual property licences, shares and net assets in Nestlé’s infant nutrition businesses in southern Africa and Australia.

The southern African infant nutrition business, which spreads across South Africa, Botswana, Namibia, Lesotho, Swaziland and Zambia, posted revenues of US$19.6mn in 2012, while the Australian business had posted US$85.5mn revenues.

Aspen has received approval from the Australian competition authorities for the acquisition of the business, while the approval for acquisition of the African business has been pending from the South African and Namibian competition authorities.

The Australian acquisition will be effective from 28 April 2013.

A statement from Aspen said, “We understand the potential of these products as we are familiar with the brands having marketed these in South Africa under licence in the recent past.

“The transaction presents a good commercial and strategic fit for Aspen, given its heritage with these brands and its strength in the infant nutrition market in South Africa, coupled with its local manufacturing capabilities.”

The deal would award Aspen the exclusive right of use of certain Nestlé’s S26 and SMA product trademarks in Australia and southern Africa for a period of ten years, while allowing the group to retain the right to co-brand the licensed products during the period.

Also, for a further 10-year period, commencing after the initial 10-year exclusive license period, Nestlé would be precluded from commercialising the licensed products, effectively providing Aspen with a 20-year period to establish equivalent Aspen-branded infant nutrition products.

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