Who owns Enfamil? All about the product’s shifting ownership

Enfamil is looking to cash in on the current baby formula shortage in the United States by filling the gap left by Abbott Laboratories. Abbott recalled its products following reports claiming four children fell ill and two died after consuming formula made in its Sturgis, Michigan, plant. 

Reckitt, Enfamil’s parent company, told Reuters that it currently accounts for more than 50% of the baby formula supply in the United States. With Abbott expected to remain closed for at least six more weeks, Enfamil has stepped up production of its products, hoping to command a larger market share than it had before Abbott’s closure. 

The Mead Johnson company, founded by Edward Mead Johnson, created Enfamil in late October 1959

In 1886, Edward Mead Johnson and his brothers founded Johnson & Johnson. A decade later, Mead founded The American Ferment Company to manufacture digestive aid. 

In 1897, Mead branched out on his own, creating Mead Johnson & Company in Jersey City, New Jersey. The company made its first major infant formula in 1910. 

Edward’s company moved to Evansville, Indiana, in 1915 to have easier access to the farm produce needed for its products. Lambert Mead Johnson succeeded as CEO after Edward’s death in 1934. He served as CEO until 1955, four years before the company introduced Enfamil to the market. 

Pharmaceutical company Bristol-Myers owned Mead Johnson from 1968 to 2009

Bristol-Myers acquired Mead Johnson for $240 million in 1968. After over four decades of ownership, Bristol-Myers announced its intention to spin off Mead Johnson to focus on its pharmaceutical business. 

Following the split, Mead Johnson’s publicly-held shares carried a market value of over $7.3 billion. Mead Johnson had gone public ten months prior and was the best performing IPO stock on the New York Stock Exchange, with a rise in the value of nearly 80% from the initial share price. 

“We welcome all our new shareholders as a result of this transaction, and assure them that we remain focused on striving towards our vision to be the world’s premier pediatric nutrition company and living our mission to create nutritional brands and products trusted to give infants and children the best start in life,” then-CEO and president, Steven Golsby, said. 

“With a successful execution of this split-off, we fully consider ourselves a BioPharma company,” Bristol-Myers Chief Executive, James M. Cornelius, said (per Reuters).

Reckitt Benckiser acquired Mead Johnson in 2017 for $17.9 billion, including debt

Reckitt Benkiser, famous for manufacturing Durex condoms, acquired Mead Johnson in 2017 for $17.9 billion, surprising many financial experts.

Rumors of a Mead Johnson acquisition had persisted for several years, but few expected UK’s Reckitt Benckiser to move for the company. Analysts expected that either Nestle or Danone would table a bid for Mead Johnson. 

According to the Chicago Tribune, Reckitt’s then-CEO Rakesh Kapoor stated that the company had eyed Mead Johnson for several years. 

Raul Damas, a Reckitt Benckiser spokesman, predicted that the merger would produce $250 million in cost savings by the third year due to consolidated overhead costs and improved supply chain efficiencies. Damas added:

“A key part of the deal rationale is acquiring Mead Johnson’s experience and expertise, and investing in Mead Johnson’s (research and development) and regulatory functions. The synergies are not driven by workforce reductions.”

Reckitt sold most of its infant formula share of the China market in mid-2021

In the couple of years after Reckitt’s acquisition, Mead Johnson’s sales improved. Sales numbers began declining in the third year following increased competition in markets like China. 

Reckitt announced the sale of its infant formula China business to local investment firm Primavera Capital Group in mid-2021. The company sold assets worth an estimated $2.2 billion and retained an 8% stake in the business. 

Reckitt left China due to weaker prospects for growth in its infant and child-nutrition arm in the market. In the company’s reporting of its 2020 financial results, Reckitt said business had been affected by trade restrictions between mainland China and Hong Kong, falling birth rates, and increased local competition. 

The company incurred a loss in its departure from the Chinese market, but CEO Laxman Narasimhan projected optimism, stating that Reckitt envisioned ‘better and more consistent growth’ going forward. Laxman added:

“We are market leaders in infant nutrition in North America, ASEAN and Latin America, and we have a strong vitamins, minerals and supplements portfolio, which includes an exciting Adult Nutrition business.”

“This, combined with our focus on execution, brand building and productivity, our investment in R&D and innovation, and our expertise in e-commerce, gives us a solid foundation from which to grow.”

Primavera acquired a perpetual and exclusive license to Mead Johnson brands, including Enfamil. It described the acquisition as ‘another milestone’ for its business. Fred Hu, Primavera’s founder, described Mead Johnson as ’a long-established and renowned multinational infant and children nutrition brand.’

Martin Deboo, an equity analyst, speculated that Reckitt’s would eventually give up its 8% stake in the China infant formula market, but the move would cost the company. He said (per Just Food):

“By licensing to a local partner and keeping the global IP in the brands, they retain an option on an eventual complete exit – but at the expense of one-off costs that represent 40% of the gross valuation and material diminution of their distribution platform in China.”

Kasper Jakobsen has served as Mead Johnson’s CEO since 2013

Mead Johnson’s ownership has changed twice in the last 15 years – and is likely to change again soon – but its leadership has remained largely consistent over the years.

Kasper Jakobsen, the company’s current CEO and president, succeeded the retiring Stephen W. Golsby, who’d held the position since 2008, in April 2013. 

Jakobsen joined Mead Johnson as head of marketing in Asia in 1998. He was later promoted to Senior Vice President & General Manager in the Asia Pacific, which involved overseeing operations in China. 

Kasper became the company’s COO and Executive Vice President in January 2012. The board unanimously appointed Kasper Jakobsen as Stephen W. Golsby’s successor. Jim Cornelius, Mead Johnson’s Chairman of the Board, said:

“Throughout his career at Mead Johnson, Kasper has displayed a keen understanding of our operations, our customers, our markets, and the issues that drive this industry. The Board looks forward to working with him and his entire leadership team, while at the same time continuing to benefit from the experience and insights of Steve Golsby.”

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