China: Reckitt Benckiser to offload infant formula business for $2.2billion

British consumer goods multinational, Reckitt Benckiser has signed an agreement to sell its infant formula and child nutrition business in China to a private equity firm Primavera for $2.2 billion.

The deal includes a manufacturing site in Nijmegen, the Netherlands and Guangzhou, China, and the royalty-free perpetual and exclusive licence of the Mead Johnson and Enfa family of brands in China.

According to sources, Reckitt Benckiser will receive $1.3bn in cash to pay down debts, and it will keep 8 per cent stake in the business.

“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,” said Reckitt Benckiser CEO, Laxman Narasimhan. “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.”

Source: Financial Times