Feb 12, 2017 05:51 AM EST

Reckitt Benckiser Acquires Mead Johnson Nutrition Creating A Procter & Gamble Rival

One of the large companies in the United Kingdom just got bigger. Reckitt Benckiser is adding Mead Johnson Nutrition to the list of companies that it has acquired in an effort to expand its scale, customer base and offering.

Yahoo! Finance reported the British consumer goods company will be paying $16.6 billion to buy the U.S. baby formula maker. The $90 per Mead Johnson Nutrition share price does not seem to be a bad deal for the investors who hold the stock of the U.S. baby formula maker.

In addition to the cash consideration, Reckitt Benckiser will also assume Mead Johnson Nutrition's debt, so the total price of the transaction is actually $17.9 billion. The consideration for the transaction will be financed using a credit line from some of the global large banks. Jobs & Hire previously reported that the British consumer goods company is willing to pay that much amount for Mead Johnson Nutrition.

The acquisition signals a new era for Reckitt Benckiser, which has been embroiled in a safety scandal in South Korea. Sales of the British consumer goods company has been lagging during the past few quarters.

The acquisition of Mead Johnson Nutrition will double the size of Reckitt Benckiser's consumer health business and help it expand geographically. In particular, the deal would help the British consumer good company expand in China, one of the most promising markets in Asia. This would help Reckitt Benckiser compete with its main rival, Procter & Gamble.

Jobs are usually at risk during mergers and acquisitions. However, Reckitt Benckiser declined to provide details about whether some of Mead Johnson Nutrition's employees will be laid off. Mead Johnson Nutrition executives who will lose their jobs after the transaction closes will receive multimillion dollars in separation fee.

Reckitt Benckiser's brands, including Dettol, Durex, Air Wick, Scholl, Nurofen, Vanish, Harpic, Lysol, Veet, Finish, Strepsils, Cillit Bang, Mucinex, Gaviscon, Mortein, Clearasil and Woolite, are famous around the world

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