Perrigo to sell infant formula business to MeridianMade for up to $175m

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Perrigo Company has agreed to sell its infant formula business to US contract manufacturer MeridianMade in a deal worth up to $175 million.

The agreement includes $40 million in cash at closing, with a further $135 million payable subject to the achievement of performance milestones through 2030.

Perrigo said the divestiture follows a comprehensive review of strategic alternatives for the business and forms part of its strategy to focus on its core consumer self-care portfolio.

The company expects the sale to improve its margin profile and significantly reduce future capital expenditure requirements.

Albert Manzone, Perrigo's interim president and CEO, said: "Today's announcement marks an important milestone in advancing the Streamline pillar of our Three-S plan to stabilise, streamline and strengthen the business".

He added that the transaction would allow Perrigo to concentrate resources on its core portfolio of over-the-counter products addressing everyday health needs.

MeridianMade CEO Ron Belldegrun and president Mia Funt said the acquisition would support the continued supply of store-brand infant formula, which offers US families a more affordable option for infant nutrition.

The companies will continue to operate independently until the transaction closes. Perrigo will retain ownership and operational responsibility for its infant formula business during the transition, maintaining its focus on safety, quality, reliable supply and customer service.

In the four quarters ended 27 June 2026, Perrigo's infant formula business generated net sales of $380 million and segment adjusted operating income of $8 million.

Perrigo expects to record a non-cash impairment charge of between $275 million and $375 million in the fourth quarter of 2026 in connection with the transaction.

The business will remain part of Perrigo's reported results for the third quarter of 2026 before being classified as discontinued operations from the fourth quarter onwards.

The transaction is expected to close in the first half of 2027, subject to customary closing conditions and regulatory approvals.