UPDATE 1-EU OKs Nestle buy of Novartis unit with concessions
(Updates with Nestle comment)
BRUSSELS, June 29 (Reuters) - Nestle (NESN.VX) has won permission, subject to conditions, from the European Commission on Friday to buy the medical nutrition business of Swiss pharmaceutical group Novartis AG (NOVN.VX) for $2.5 billion.
The European Union executive said on Friday it gave the green light after Nestle offered to divest overlapping activities in France and Spain.
"In the light of these commitments, the Commission has concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it," the executive said in a statement.
The overlapping activities centred on enteral healthcare nutrition, or treatments delivered to patients through their intestinal tract.
Novartis will divest all its healthcare nutrition business in France and Nestle will divest its healthcare nutrition business in Spain.
Nestle said the divestments would have no financial impact on the acquisition. "We are pleased with the deal overall. We'll inform more fully once the deal is done," said Nestle spokesman Francois Perroud.
Nestle shares closed up 1 percent at 466 francs, Novartis up 0.36 percent at 69 francs.
The deal would raise Nestle to the No. 2 position globally in the fast-growing niche business of providing specialised food to hospital patients.
The sale follows Nestle's $600 million purchase of U.S. food company Jenny Craig, which makes food products and services such as weight management programmes.
((Reporting by David Lawsky and Huw Jones, editing by Dale Hudson, Quentin Bryar; Reuters messaging david.lawsky.reuters.com@reuters.net; e-mail david.lawsky@reuters.com; +322-287-6811. Brussels newsroom)) Keywords: NESTLE NOVARTIS/EU
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