7th Jun 2021 06:39
(Alliance News) - Reckitt Benckiser Group PLC on Saturday announced that it has agreed to sell its infant nutrition business in China to Beijing-based investment firm Primavera Capital Group for USD2.2 billion.
The Slough, Berkshire-based consumer health and hygiene products company's disposal will include the manufacturing plants in Nijmegen in the Netherlands and Guangzhou, China, as well as a royalty-free perpetual and exclusive licence of the Mead Johnson and Enfa brands in China.
Reckitt will continue to own the Mead Johnson and Enfa family of brands globally.
The sale of the infant nutrition business in China stems from the group's strategic review of the business first started in February, as for 2020 its performance was badly affected by restrictions on cross-border trade activity between Hong Kong and mainland China, as well as Covid-19.
In April, Sky had reported that private equity firm Carlyle was among suitors showing an interest in the business.
The sale is subject to several conditions, including a consultation with Reckitt's works council in the Netherlands. Depending on when all conditions are fulfilled, the sale is expected to be completed in the second half of 2021.
Proceeds from the sale will go towards the reduction of net debt.
"After a thorough review of our infant formula and nutrition business in China, we have found an excellent home for the business under the ownership of Primavera. As a result of this transaction, Reckitt's Nutrition business going forward will have a better and more consistent growth and margin profile," said Chief Executive Officer Laxman Narasimhan.
By Dayo Laniyan; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
Reckitt