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Bloomberg
Reckitt Benckiser Group has agreed to sell its Chinese baby formula business to Primavera Capital Group in a deal with $2.2 billion enterprise value.
Reckitt will retain an 8% stake and sees net cash proceeds of about $1.3 billion, which the company plans to use to reduce debt. The household products maker expects to record a net loss of about ~£2.5 billion related to the sale, primarily on the re-measurement of goodwill and intangible assets for the unit.
The deal includes manufacturing plants in Nijmegen, the Netherlands and Guangzhou, China and exclusive license of the Mead Johnson and Enfa family of brands in China, while Reckitt continues its global ownership and will operate the brands in the rest of the world.
Laxman Narasimhan, Reckitt’s chief executive officer, said the company remains committed to its hygiene, health and VMS portfolios in China.
The divestiture is seen completed in the second half of 2021.