Danone battles with Nestlé for Pfizer unit Danone, the owner of the Evian bottled water and Activia yoghurt brands, has increased its bid to stay in the race for Pfizer's infant nutrition business, which analysts believe could fetch around $10bn, according to people familiar with the matter. The French company is bidding against Nestlé, seen as the frontrunner due to its stronger balance sheet. Shares in the French company closed 3.6 per cent lower at €52.43 in Paris on Friday on fears that Danone, which owns Bledina baby food thanks to its 2007 acquisition of Numico, the Dutch baby food group, might overpay. Danone paid €12.3bn for Numico, equivalent to 23 times earnings before interest, tax, depreciation and amortisation. Andrew Wood, analyst at Bernstein Research said in a note: "By common consensus (and sensible financial rationale), Danone significantly overpaid for Numico." The French company is expected to line up interested parties to whom it would sell on those parts of the Pfizer unit it did not wish to keep. Its main interest is in emerging markets, principally Asia. Danone would not comment but Franck Riboud, chairman and chief executive, said in February that: "part of Pfizer nutrition could interest us in order to accelerate our development in this business in which we are the number two in the world and especially in order to enter new countries." Pfizer is selling its nutrition and animal health units to focus on its core business. It has a strong presence in China and other emerging markets such as Saudi Arabia, Mexico and the Philippines. Danone's baby nutrition unit has sales last year of €3.7bn, overtaking water to become its second largest business by sales after dairy which had sales of €11.3bn. Robert Dickinson, analyst at Citigroup, said in a note that Danone, which has net debt to ebitda of 2 times, would be mindful of piling on debt in order to win the auction. Danone's management has reiterated its commitment to maintaining its current A minus credit rating in recent conference calls. This suggests that the balance sheet would not be stretched to over 3x net debt/ebitda which we estimate would be necessary to fund an acquisition of 70 per cent of the business (assuming 30 per cent disposal due to antitrust issues)," he said in a note. Pfizer is expected to announce the winning bid next week but the timetable could slip. Additional reporting by Anousha Sakoui in London