(Yicai Global) June 7 -- The British owner of baby milk brands Mead Johnson Nutrition and Enfinitas has sold its waning infant formula and children’s nutrition business in China to Beijing-based Primavera Capital Group, expecting to gain USD2.2 billion.
The transfer involves the exclusive license of the Mead Johnson and Enfa family of brands in the Asian country, Slough-based Reckitt Benckiser Group said in a statement on June 5. The deal also includes manufacturing facilities in Nijmegen, the Netherlands, and in southern China's Guangzhou.
The British owner of Dettol and Durex entered the baby formula business by purchasing Chicago-based Mead Johnson for USD16.6 billion in February 2017. But the US firm's factory was going through some technical issues in 2018, causing its sales to decline in the first half of 2019. In the meantime, the Chinese maternity and infant care market was expanding rapidly with a compound annual growth rate of 15.1 percent.
Primavera Founder and Chairman Fred Hu was optimistic about the purchase. "We are excited to support the business in its next phase of growth, leveraging our resources and local leadership."
The private equity firm has invested in dairy before. In November 2019, Primavera Capital joined hands with Ping An Capital and Shijiazhuang Junqian Enterprise Management to acquire a 51 percent stake in Shijiazhuang-based Junlebao Dairy for CNY4 billion (USD625.2 million).
After the transaction, Reckitt remains committed to the Chinese market with its three portfolios of hygiene, health, as well as vitamins, minerals, and supplements, said Chief Executive Laxman Narasimhan.
Editor: Emmi Laine, Xiao Yi