Mumbai: Groupe Danone of France have agreed to acquire Netherlands food group Royal Numico NV, Europe''s largest baby-food maker, for 10.6 billion euros ($14.5 billion) in cash.

In a joint statement, Danone said it was offering €55 euros ($75) a share, which is a 44 per cent premium over the company''s average share price over the last three months. Numico said the offer was "a very attractive proposition for all of our stakeholders." Numico has a market capitalization of about €8.5 billion ($11.6 billion).

The deal, backed unanimously by both boards, is expected to reach definitive agreement within the next few weeks, the companies said.

Meanwhile, trading in Numico shares on the Euronext were suspended after surging as much as 13 per cent on speculation about a takeover by PepsiCo Inc. or Groupe Danone SA. Euronext said the shares were halted pending a statement from Numico, which has a market value of €8.6 billion ($11.7 billion).

Pepsi, however, is not into the business of baby foods. The company''s international sales rose 14 per cent last year to $12.96 billion on demand for Lay''s chips, Pepsi soda and bottled water from Russia to China.

Food and beverage companies have been in deal-making mode lately, as some of the biggest players consider shuffling their assets. Cadbury-Schweppes is considering a sale of its drinks unit, and Coca-Cola has expressed interest in buying Cadbury''s Snapple iced-tea business.

Danone has also been the subject of takeover rumors. Its shares rose last week after a French radio station reported that Pepsi was considering making a bid for Danone.

Numico stock gained as much as 5.05 euros to 45 euros in Amsterdam . It had climbed 11 percent to 44.50 euros when the suspension was imposed around 12:15 p.m. local time. Danone slipped 19 cents, or 0.3 per cent, to 61.31 euros at 2:30 p.m. in Paris. Pepsi''s German shares added 1 cent to $66.23.

A purchase would be the second multi-billion-dollar baby- food takeover in Europe this year. Nestle SA agreed in April to acquire Novartis AG''s Gerber unit for $5.5 billion. Nestle, the world''s largest food company, has committed about $10 billion since 2005 to buying nutrition companies, whose sales are growing faster than the rest of the food industry.

A combination of Numico and Danone would be a perfect blend, said an industry analyst. A purchase of Numico could complement Danone''s focus on health-enhancing food, such as its Actimel immunity-boosting milk drink.

Just a week ago Paris-based Danone said it had reached an agreement to sell its biscuit business to Kraft Foods Inc. for €5.3 billion in cash. Danone said the sale would help it focus better on its faster-growing yogurts and bottled water business, the sort of healthier fare that consumers are looking for.

The acquisition of Numico would launch Danone as a global player in the infant formula and clinical nutrition area. Danone, which has a small infant and clinical nutrition business largely focused on France, is keen to grow in an area where consumers tend to be highly loyal to a favorite brand and are willing to pay top prices.

Numico, the world''s fourth-largest manufacturer of infant formula, is much smaller than rivals such asNestle SA and Bristol-Myres Squibb Co. However, it has the advantage of focusing on just two areas: baby foods, which account for about two thirds of sales, and clinical nutrition, which accounts for the rest.

The Numico acquisition would follow two large acquisitions by Nestle, the world''s largest infant formula maker. Earlier this year, it bought the Gerber baby food business from Novartis AG, as well as the drug giant''s clinical nutrition division for a combined $8 billion.