Swiss food and drinks group Nestlé has completed its $2.5 billion (SFr3.03 billion) takeover of Swiss pharmaceutical giant Novartis's Medical Nutrition business.
Nestlé was required to divest health care nutrition units in France and Spain to comply with demands by the European Commission, which was concerned by Nestlé's new dominance of the market for liquid food, used to feed patients intravenously.
The deal, announced in December 2006, gives Nestlé control of brands such as the Boost and Resource nutritional supplements and Optifast dieting products. It also sees 2,000 Novartis employees join the Vevey-based company.
Shares in Nestlé were up 0.65 per cent at SFr469 ($387) on the Zurich exchange at midday on Monday.
Novartis, meanwhile, announced it would invest €270 million (SFr445 million) to expand its cooperation with Austrian vaccine maker Intercell AG.
The move means the Basel-based pharmaceuticals company will increase its share in Intercell to 16.1 per cent from 10 per cent and gain access to vaccines against pneumonia, among other diseases.
Based in Gland, western Switzerland, Medical Nutrition was expected in 2006 to generate around $950 million in net sales and around $90 million of operating income. It is active in around 40 countries.
Medical Nutrition, formerly part of the Novartis's business's consumer health division, is the number two global supplier of intestinal nutrition, oral nutrition and medical devices used to provide essential nutrients to patients with special medical conditions.
These products are often required when illness, surgery or disability limit the ability of patients to eat a balanced diet.
"I am very pleased that this acquisition allows us to become a very strong player in the strategic core category of nutrition, including specific research and development," said Peter Brabeck, Nestlé chief executive and chairman, in December.
"This is a very important step for the Nestlé Group in its strategic transformation process to a nutrition, health and wellness company as it strengthens the core of our globally managed Nestlé Nutrition business."
swissinfo with agencies
Nestlé, the leading food business ahead of Unilever, Kraft and Danone, is among the top 30 companies in the world in terms of capital.
It employs around 250,000 people in five continents. In 2005 its sales totalled SFr91 billion and its net profit was SFr7.9 billion. It is moving towards the health and wellbeing sectors.
Novartis, created in 1996 through the merger of Ciba-Geigy and Sandoz, is currently organized into four divisions: Pharmaceuticals (prescription medicines); Vaccines and Diagnostics, a new division focused on the development of preventive treatments and tools; Sandoz, (generic prescription drugs) and Consumer Health.
Nestlé 2006 figures
Net profit: SFr9.2 billion
Sales: SFr98.5 billion
Novartis 2006 figures
Net profit: $7.20 billion
Sales: $37.02 billion