March 30, 2010 / 4:21 PM / 10 years ago

Mead Johnson, Saudi's Almarai set up baby food JV

* Saudi’s Almarai, Mead Johnson in 50-50 JV baby food JV

* Mead contributes know-how, Almarai market - analyst

(Adds background, Mead CEO, analyst comments)

JEDDAH, Saudi Arabia, March 30 (Reuters) - Saudi Arabia’s Almarai Co. (2280.SE) said on Tuesday it will partner with U.S. baby formula maker Mead Johnson Nutrition Co MJN.N to make baby food products in the Gulf Arab region.

“The joint venture, which will be held 50 percent by Almarai, will draw on the two partners’ complementary brands and capabilities,” Almarai, the Gulf’s largest dairy company by market value, said in a bourse statement.

The joint venture is expected to start production in 2011, the statement said, without giving the value of the deal.

“This venture offers us a great entry point into the (Gulf), a market we had prioritized because of its size and attractive demographics - with strong birth rates, above-average income levels and excellent potential for growth,” said Steve Golsby, president and CEO of Mead Johnson, on the company website.

“The JV will benefit from Mead Johnson’s product knowledge, while Almarai can easily bring to the table its local market understanding, its dairy supply, and to a certain extent, its distribution network capabilities,” said Laurent-Patrick Gally, equity researcher at Shuaa Capital, in a statement.

Almarai, which has been diversifying its sources of revenue through acquisitions, recently acquired two companies in the Middle East and is looking at more opportunities in Egypt, after spending $115 million last year to buy an Egyptian dairy firm [ID:nLC353824].

Almarai is also involved in joint ventures with Greece-based Vivartia, in the bakery business, and Pepsico PEP.N, for dairy and fruit juice products.

Almarai’s shares closed up 1.9 percent earlier on Tuesday, outperforming the bourse index .TASI which gained 0.7 percent. (Reporting by Asma Alsharif; Editing by Firouz Sedarat and Jon Loades-Carter)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below