Danone and Mead Johnson have received approval to jointly bid for Pfizer's infant nutrition division, which puts them in competition with Nestlé in the next auction round in March.
Although Danone and Mead Johnson were evaluating the viability of a joint bid over several weeks, the companies required an approval from Pfizer in order to bid together for the division, which is valued at $10bn, reports Reuters.
According to reports the joint bid makes it easier for the companies to secure financing and lower the risk of taking on too much debt.
The company expects to announce a decision on the process by this year and complete any transaction between July 2012 and July 2013.
Pfizer, which gained the baby food unit through its acquisition of Wyeth in 2009, is divesting its animal health and nutrition businesses as a part of its strategy to focus more on drug development, after losing patent protection for cholesterol drug Lipitor, which affected its net income.
Pfizer said that it has not made a decision on the infant-nutrition unit, and is still in the process of exploring its options, which include a sale, spinoff or other transaction.
Pfizer's baby food unit posted sales of $1.9bn last year, and owns formula brands such as SMA Gold and Promil Gold.
