A general view with a giant jar of yogurt is seen outside the exhibition to mark the 90th anniversary of the French foods company Danone, in Paris on April 2, 2009. Reuters/Jacky Naegelen

Danone (OTCMKTS:DANOY) is reportedly in talks to sell its medical-nutrition business to Hospira Inc. (NYSE:HSP) for nearly $5 billion, in a deal that would allow the latter to move its tax base to Europe.

The deal would help Illinois-based Hospira, which manufactures medical devices, to save on U.S. taxes, in a process known as tax inversion that requires 20 percent of the company’s shares to be held outside of the U.S. The deal comes after AbbVie (NYSE:ABBV), the holding company for Abbott Laboratories, acquired Dublin-based Shire Plc (NASDAQ:SHPG) for $54 billion in a similar tax inversion deal.

The practice has been criticized by U.S. President Barack Obama who has said that companies indulging in the practice are harming the U.S. economy by “cherry-picking the rules” to save taxes, according to the Wall Street Journal.

"If you are basically still an American company but you simply change your mailing address in order to avoid paying taxes then you are really not doing right by the country and its people," Obama told CNBC in an interview last week.

It is not clear if Danone is talking to other companies as well for the sale of the medical-nutrition division, which it had previously discussed with Swiss giant Nestle (OTCMKTS:NSRGY), the Journal reported, citing a person familiar with the ongoing discussions. Neither Danone nor Hospira have confirmed the talks.

Danone entered the medical nutrition business in 2007 by acquiring Dutch company Numico. The division, which is responsible for baby-food brands such as Nutricia and Cow and Gate, grew more than 7 percent, according to a company statement, in the first half of 2014, and gained ground in markets such as Brazil, Turkey, China and the U.K.

In 2013, Danone's Nutricia unit in China was investigated following bribery allegations, which claimed that the company had bribed more than 100 doctors at 14 hospitals in Beijing, issued false receipts for reimbursements and gifts, and paid for doctors' junkets between 2010 and 2013.

In 2007, Danone sold its baked goods business to Kraft Foods Group (NASDAQ:KRFT) for $7.2 billion, and since then, the company has entered new markets, including in Asia, to expand further.

For Hospira, which has a market capitalization of $8.46 billion, the deal would be the biggest one after its acquisition of Australian generic-drug manufacturer Mayne Pharma Group Ltd. (ASX:MYX) in 2007 for about $2 billion.