The worst acquisition by a major UK company in the last decade? It’s hard to think of a deal that beats Reckitt Benckiser’s $18bn purchase in 2017 of Mead Johnson Nutrition, a US-listed maker of baby milk formula. Shares in the Dettol-to-Durex group have never recovered from the shock. By way of add-on award, Rakesh Kapoor, Reckitt’s chief executive back in the day, can probably scoop the prize for most overpaid FTSE 100 boss of recent times: he departed two years after his fateful piece of deal-making having been paid the astonishing sum of £97.6m during his eight years in charge.
The latest example of Mead Johnson’s dreadful legacy was Friday’s news that a court in Illinois awarded $60m in damages to a woman whose premature baby died in intensive care after consuming the company’s Enfamil formula; the allegation was that Reckitt failed to warn adequately that feeding with infant formula increased the risk of necrotising enterocolitis (NEC). The verdict knocked 15%, equivalent to £5.4bn, off Reckitt’s stock market value as investors tried to guess what could follow from 400-odd similar NEC-related cases involving Mead and its US rival Abbott Laboratories.
