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Last Updated: Tuesday, 10 July 2007, 06:51 GMT 07:51 UK
Danone bids $17bn for Dutch rival
Numico Cow & Gate brand baby food products
Numico's brands include Cow & Gate, Milupa, Bebilon and Bebiko
French food group Danone has offered 12.3bn euros ($16.7bn; 8.3bn) for Dutch baby-food maker Royal Numico.

The all-cash offer of 55 euros a share would create what Danone claims would be the world's largest food firm.

Under the takeover, Danone would gain control of baby food brands Cow & Gate, Milupa and Nutricia, which hold around a 40% share of the European market.

The news comes a week after Danone said it was in talks to sell its biscuit unit to Kraft Foods, for 5.3bn euros.

"Last week I sold a business, this week I bought a business. I don't know what I am going to do next week," Danone chief executive Franck Riboud said, asked whether Danone planned to buy any more companies.

'Fair deal'

Mr Riboud added that the Numico deal was a "real friendly" one and would make a "good geographical" fit for the company.

"I think it is a fair price for a unique company and a unique combination," he added.

Analysts have suggested the French firm's bid for Nutricia is part of an effort to repel any prospective takeover offers.

According to weekend press speculation New York-based PepsiCo is considering making an approach for the French group.

Numico's chief executive, himself a former Danone employee, has welcomed the deal, but Jan Bennick also said he would resign from his post as soon as it is completed.

A definitive agreement on the deal, which has the backing of both companies' boards, is expected to be reached within weeks.


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