Fresenius eyes bid for Danone tube feeding products arm - sources

By Andreas Kröner and Arno Schuetze

FRANKFURT (Reuters) - German diversified healthcare group Fresenius (GER:FRE) is considering making a bid for the medical nutrition unit of France's Danone (PAR:BN) in what could be a 4 billion euro (3.2 billion pounds) deal, two people familiar with the matter told Reuters.

The business, which Reuters reported last week could soon be for sale as Danone expands its dairy business in higher-growth emerging markets, would complement Fresenius's Kabi unit, which makes tube feeding and intravenous feeding equipment and products as well as generic infusion drugs.

For Fresenius it would be the third deal worth more than $1 billion (598 million pounds) over the last two years.

Fresenius in September agreed to buy most of Rhoen-Klinikum's (RHKG.DE) hospitals for 3.07 billion euros, cementing the buyer's position as Germany's largest private-sector hospitals operator.

Danone's Medical Nutrition business, which also makes products like hypoallergenic baby food, could also attract interest from peers such as Abbott (NYS:ABT), Nestle (VTX:NESN), Baxter (NYS:BAX), sources have said.

JPMorgan (NYS:JPM) has been asked to find a buyer for the European market leader, which in 2012 posted sales of 1.3 billion euros and earnings before interest and taxes of 231 million euros.

Fresenius and Danone declined to comment.

(Additional reporting by Sophie Sassard and Dominique Vidalon; Writing by Ludwig Burger; Editing by Victoria Bryan)