(Provides deal particulars, background on China toddler vitamin enterprise)
By Siddharth Cavale
June 5 (Reuters) – British client items maker Reckitt Benckiser Group Plc mentioned on Saturday it was promoting its toddler method and baby vitamin (IFCN) enterprise in China to funding agency Primavera Capital Group for an enterprise worth of $2.2 billion.
The Lysol disinfectant and Dettol cleaning soap maker will retain an 8% stake within the IFCN China unit and anticipates internet money proceeds from the sale to be about $1.3 billion, it mentioned in an emailed assertion.
Reckitt expects to incur a internet lack of 2.5 billion kilos ($3.5 billion) on the disposal, primarily because of the re-measurement of goodwill and intangible property, it mentioned.
Reuters in March reported that the Slough, England-based firm was contemplating the sale of the enterprise.
The sale closes a strategic overview of IFCN China launched in February because of sluggish gross sales brought on by intense competitors from native Chinese language child method manufacturers and slowing start charges in China.
Reckitt executives have additionally attributed Hong Kong border closures through the COVID-19 pandemic as weighing on the enterprise, which it acquired as a part of its $16.6 billion buy of U.S.-based Mead Johnson in 2017.
In the identical sector, French dairy group Danone offered its 9.8% stake in China Mengniu Diary in Could for about $1.6 billion euros.
Reckitt’s Better China toddler method enterprise represents 6% of group gross sales, which have been nearly 14 billion kilos ($19.82 billion) in 2020, up 11.8% year-on-year.
On Saturday, Reckitt mentioned the deal included the sale of its manufacturing vegetation at Nijmegen within the Netherlands, and in Guangzhou, China, and a royalty-free perpetual and unique license of the Mead Johnson and Enfa household of manufacturers in China.
After the deal’s shut, anticipated within the second half of 2021, Reckitt will personal and function the Mead Johnson and the Enfinitas, Enfamil and Enfagrow manufacturers in the remainder of the world. ($1 = 0.7065 kilos) (Reporting by Siddharth Cavale in Bengaluru Enhancing by David Holmes)