Reckitt Benckiser is set to sell its infant formula and child nutrition business in China in a multi-million-pound deal.
The firm, whose health care business is headquartered in Hull, has entered into a definitive agreement to sell its Infant Formula and Child Nutrition business in China (IFCN China) to Primavera Capital Group for an implied enterprise value of $2.2 billion.
The transaction is structured as a sale of the entirety of IFCN China, including the manufacturing plants in Nijmegen, the Netherlands and Guangzhou, China.
It includes a royalty-free perpetual and exclusive license of the Mead Johnson and Enfa family of brands in China.
Following completion of the transaction, Reckitt will retain an 8% share in IFCN China and continue to own the Mead Johnson and Enfa family of brands globally.
Reckitt CEO Laxman Narasimhan commented: “Today’s announcement marks another step in our strategy to rejuvenate growth and create long term value. As part of this journey, we are actively, and decisively, managing our portfolio.
“After a thorough review of IFCN China, we have found an excellent home for the business under the ownership of Primavera. As a result of this transaction, our nutrition business going forward will have a better and more consistent growth and margin profile.
“We remain committed to China with our Hygiene, Health and VMS portfolios. We are excited about the opportunities to grow our brands and expand our business in the future.
“China is Durex’s largest market and growing strongly and it is an important market for Dettol, Finish and our VMS brands with significant potential for future expansion.”