PITTSBURGH -- General Nutrition Companies announced here last week an agreement to be acquired by Royal Numico, a Netherlands-based manufacturer of specialized nutritional foods and products. The deal, valued at over $2 billion, will create the world's largest nutritionals company, according to a joint statement released by the companies' top executives.
creates the largest company in the world exclusively devoted to human nutrition," J.C.T. van der Wielen, president and chief executive officer of Numico, Zoetermeer, The Netherlands and William E. Watts, president and CEO of GNC, said in a joint statement.
"It enhances GNC's current leading position in the U.S. nutritional-supplements segment and positions Numico to be a leader in the worldwide supplements market -- a market where proprietary research coupled with marketing and branding expertise will determine category leadership," they said.
Under the terms of the agreement, Numico will make a $25 per share cash tender offer for all of GNC's approximately 75 million outstanding shares and options and will assume $760 million in debt, valuing the transaction at approximately $2.5 billion.
The combined company would have pro forma sales of about $3 billion in U.S. dollars, based on both companies' fiscal 1998 financial statements, and will employ nearly 27,000 people worldwide.
Watts and the senior managers of GNC have entered into employment agreements to remain with Numico following the merger. Additionally, Watts is expected to be named to the board of managing directors of Numico.
Numico earned a profit of $180 million on sales of $1.6 billion last year. GNC reported a 1998 profit of $90 million on sales of $1.4 billion during the same period.