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Nestlé (NESN) has continued its strategic acquisition programme with a deal to buy gastrointestinal medication producer Zenpep.

Nestlé said the move aims to expand the company’s medical nutrition business and complement its portfolio of therapeutic products.

Zenpep, available in the US, is a medication for people who cannot digest food properly because their pancreas does not provide enough enzymes to break down fat, protein, and carbohydrates.

Zenpep’s 2018 net sales were US$237m

“Nestlé’s acquisition of Zenpep is a strategic decision that will enhance our growing medical nutrition portfolio,” said Greg Behar, CEO of Nestlé Health Science.

“This is a significant opportunity for our business in the United States to add a complementary product to our existing range of nutrition products that support food ingestion, digestion and absorption. We have extensive experience in Zenpep’s therapeutic areas of digestive diseases through our medical nutrition business and will leverage those capabilities as we grow this new business

The deal is expected to be finalized concurrent with the merger of Allergan and AbbVie.

Financial details of this acquisition were not disclosed.

Nestlé is undergoing a major portfolio optimisation drive as it looks to sell non-core businesses and buy access to higher growth segments.

In September it sold its Gerber Life Insurance business and announced it was exploring a disposal of Nestlé Skin Health as well as selling its US confectionery business to Ferrero earlier in 2019.

Meanwhile it agreed a US$7.1bn deal for the global license of Starbucks’ global fmcg business, bought a majority stake in UK-based pet food firm and bought a controlling share in Latin American company Terrafertil.

Nestlé shares have opened down 0.5% at CHF108.32 so far this morning.

Morning update

The FTSE 100 has opened sharply down this morning, dropping 1.4% to 7,477.2pts as coronavirus fears grow.

Fallers include FeverTree (FEVR), down 2.9% to 1,489p, SSP Group (SSPG), down 2.3% to 643p, Ocado (OCDO), down 2.2% to 1,288.5p and Morrisons (MRW), down 2% to 184p.

Risers are few and far between, including PZ Cussons (PZC), up 1.7% to 205p and Devro (DVO), up 0.5% to 170.4p.

This week in the City

After the flurry of Christmas trading updates, there are a number of major companies issuing results this week as global earnings season kicks off.

The week kicks off tomorrow with a trading statement from AG Barr (BAG) and half year results from PZ Cussons, while Greencore (GNC) will host its AGM and in the US McCormick will issue its full year results and Starbucks will post its Q1s.

Wendesday sees McDonalds and Mondelez post their full year earnings.

A busy Thursday brings interims from Diageo (DGE), full year results from Unilever (ULVR), and in the US full year results from The Coca-Cola Co (KO), Amazon, Altria and The Hershey Co.

Friday will see Britvic issues its first quarter trading numbers, while Colgate will post its full year results.

In economic news, the Bank of England’s monthly interest rates decision will be announced on Thursday, with some expecting pressure to mount for a rates cut.

The BRC Shop Price index is scheduled to be published on Wednesday, while the GFK Consumer Confidence figures are released on Friday.