Fresenius SE & Company, the German health care group and Permira the European buyout firm have made a joint bid for medical nutrition business of Danone SA. According to analyst estimates that medical unit could be worth approximately €3 billion to €4.5 billion.

Danone has been in talks with buyers since March to sell its medical nutrition business. Its medical nutrition business makes food for the elderly, sick and young, but efforts to complete a sale have been complicated by potential antitrust and disagreements over price issues.

According to sources, for the medical business, suitors included Hospira Inc, the U.S. based pharmaceutical company and Nestlé SA, the Swiss food giant. Both have since dropped out.

For the medical nutrition business, finding a strategic buyer has been hampered by disagreements over antitrust and price hurdles that would arise with any combination. Permira and Fresenius have been working to carve up the business between them to avoid the antitrust challenges, however the complexity is making a quick deal difficult. By next year any deal would probably taken.

Sources added that Danone wants to know where it stands to either pursue talks or seal a deal by the end of the year or early next year or close the issue and move on.

While for potential future deals a sale could free up cash, it would also strip Danone of a business that has been posting high margins and steady growth.

Medical nutrition business of Danone is the smallest of the Danone‘s other four units, representing about 6% of sales. However after baby food, it generates the second-highest margin. Recently, it has seen strong growth with organic sales rising 5.8% in 2013.

This growth has helped Danone limit the impact of declines in other parts of its business, particularly its fresh dairy business in Europe and China.