(Bloomberg) -- Reckitt Benckiser Group Plc is weighing whether to shelve the sale of its infant nutrition unit, as high-profile deals fall victim to a worsening financing market, people familiar with the matter said.

Talks between the London-listed consumer goods and potential acquirers have stalled in recent weeks, the people said, asking not to be identified discussing confidential information. The business, which sells brands including Enfamil, was expected to fetch around $7 billion.  

Disagreements over valuation, a lack of available funding and an ongoing baby formula crisis in the US -- the Reckitt unit’s largest market -- complicated efforts to sell the business, the people said.

Private equity firm Clayton Dubilier & Rice was one of the few that submitted a non-binding bid for the infant nutrition unit, Bloomberg News reported in May. Blackstone Inc., Carlyle Group Inc., KKR & Co. and Bain Capital had also studied the business.

Deliberations are ongoing and Reckitt hasn’t made a final decision on whether to formally pull the sale, according to the people. A representative for Reckitt declined to comment.

A worsening credit market is hurting buyers’ ability to secure the funds needed to complete big deals. Banks have been cutting their exposure to leveraged loans for risk of being saddled with debt they can’t then sell on to investors. 

That’s cast a shadow over at least $25 billion of transactions in Europe. On Tuesday, Walgreens Boots Alliance Inc. pulled a potential £5 billion sale of British drugstore chain Boots. Financing for other high-profile deals, including the sale of UK gas station operator Motor Fuel Group Ltd., is also now in focus.

Formula Crisis

For Reckitt, the sale of its infant nutrition unit was further complicated by the formula shortage in the US that’s leaving some parents scrounging to feed their children. Supply-chain problems that had already reduced availability across the country were exacerbated earlier this year when Abbott Laboratories, the largest supplier of powdered baby formula, issued a voluntary recall and closed a plant after four infants fell ill.

Earlier this month, a group of Democratic lawmakers asked the US Department of Justice’s antitrust unit to probe Reckitt’s plan to sell its formula business to a private equity firm. Senators, including Elizabeth Warren of Massachusetts, raised concerns that a deal could burden the manufacturer with debt and further threaten the supply of formula.

Reckitt has been reviewing its portfolio under Chief Executive Officer Laxman Narasimhan. An eventual sale of the infant nutrition unit would complete a reversal of its largest-ever purchase: the $17 billion acquisition of Mead Johnson Nutrition Co. made five years ago under then-CEO Rakesh Kapoor. Narasimhan sold the Reckitt’s Chinese formula business to local buyout firm Primavera Capital last year, exiting one of its largest markets in the process.

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