Reckitt Benckiser Signs Merger Agreement To Acquire Schiff Nutrition, Topping Earlier Bayer Bid

The Board of Directors of Schiff has approved the transaction and will recommend that its stockholders tender their shares into Reckitt Benckiser’s previously announced cash tender offer of $42.00 per share, valuing Schiff at $1.4 billion.

22 Nov 2012 --- Reckitt Benckiser Group PLC has signed a definitive merger agreement with Schiff Nutrition International, Inc. a leading provider of branded vitamins, nutrition supplements and nutrition bars in the United States and elsewhere. The Board of Directors of Schiff has approved the transaction and will recommend that its stockholders tender their shares into Reckitt Benckiser’s previously announced cash tender offer of $42.00 per share, valuing Schiff at $1.4 billion. Reckitt Benckiser’s tender offer will expire at 11:59 p.m. New York City time, on December 14, 2012, unless extended in accordance with the merger agreement and the applicable rules and regulations of the SEC. Reckitt Benckiser will finance the transaction with cash and existing credit facilities. The transaction is expected to be immediately accretive to earnings on an adjusted basis.

Rakesh Kapoor, Reckitt Benckiser Chief Executive Officer, said, “We are very pleased to have reached a mutually beneficial agreement with Schiff and are excited to enter the $30 billion global vitamins, minerals and supplements market with such a strong portfolio of high quality branded business in the USA. Schiff’s portfolio is an excellent fit with our strategic focus on health and hygiene, where in health care in the USA we already have Mucinex, Delsym, Cepacol and Durex as major brands.”

“The sub-categories within which Schiff operates have strong growth momentum and to this we expect to combine Reckitt Benckiser’s strong go to market capabilities as well as proven skills in branding, innovation and consumer communication and education.“

“The integration process will be undertaken promptly following completion of the transaction, so that the business can continue its growth trajectory with minimum disruption and realize synergies as soon as possible. Reckitt Benckiser expects the tender offer to close before the end of calendar year 2012.“

Kapoor concluded, “We are confident that our considerable expertise in building great consumer brands will drive sustainable growth and shareholder returns from this transaction.”

The financial information disclosure dated October 29, 2012 and made public in Schiff’s 14C SEC filing on November 5, 2012, indicated projected net sales of approximately $385 million and forecast proforma EBITDA of approximately $84.6 million for the fiscal year ending May 31, 2013.

Pursuant to the merger agreement, Reckitt Benckiser will amend its tender offer documents to, among other matters, remove the conditions relating to due diligence and the execution of a definitive merger agreement. The tender offer will remain subject to customary conditions, including the tender of a majority in voting power of Schiff shares of common stock and the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).

Morgan Stanley & Co. Limited is acting as exclusive financial adviser to Reckitt Benckiser and no one else in connection with the matters described in this announcement. In connection with such matters, Morgan Stanley & Co. Limited, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to their clients or for providing advice in relation to the transaction, the contents of this announcement or any other matter referred to herein.

Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as Reckitt Benckiser’s legal advisor.

Reckitt first made the $42 per-share offer earlier this month only weeks after Bayer offered $34 dollars per share for the Salt Lake City-based company. The German drugmaker later said it did not want to engage in a bidding war for the company.

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