Reckitt Benckiser (RB), the FTSE 100 consumer goods group behind the Durex and Nurofen brands, says it is in advanced talks to buy a baby formula maker for $16.7bn (£13.2bn).

The UK company said it had offered to pay $90 in cash for each Mead Johnson Nutrition share in a proposed deal financed by cash and debt.

It represented, RB said, a premium of almost 30% on Mead's share price at close of trading on Wednesday. The price leaped 22% in after-hours trading.

The US firm is attractive as it has a strong foothold in the emerging markets of Latin America and Asia - particularly China.

RB's proposed price represents a multiple of 17 times Mead Johnson's estimated 2017 earnings, according to analysts at Wells Fargo.


Its statement to the stock exchange said: "The parties are presently engaged in a period of due diligence and contract discussion.

"RB presently expects to finance the possible transaction through a combination of cash and debt, whilst retaining a strong investment grade credit rating.

"There is no certainty that any transaction will ultimately be agreed, nor as to the terms on which any transaction might occur.

"A further announcement will be made as appropriate."

RB recently revealed a third quarter hit from its South Korean operation after a disinfectant scandal.

The group said in October it had started paying compensation from a £300m fund after admitting that a humidifier disinfectant produced by the company had killed 96 people in South Korea and caused illness for a further 400.

Its shares, up almost 12% over the past 12 months, were 4% higher in early trading on Thursday.