Hospira has emerged as a bidder for Danone’s medical-nutrition unit, which makes food for the sick, young and elderly, in a deal that could be worth about $5 billion and is the latest in a flurry of tax inversion deals designed to sidestep U.S. taxes,The Wall Street Journal reports.
To qualify as an inversion, shareholders of the acquired company must receive stock amounting to at least 20% of the resulting entity. Hospira, which has a market value of $8.6 billion, will need to fund a sizable part of any bid with stock.
Danone said last week that its medical-nutrition unit, which makes food for the sick, young and elderly, reported second-quarter year-over-year sales growth of 7.3%, driven by a rise in demand across Brazil, Turkey, China and the U.K.
It would also be the biggest acquisition in Hospira’s decadelong history. The company’s largest target to date was Australian generic-drug maker Mayne Pharma Ltd., which it acquired for about $2 billion in 2007.