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Reckitt Benckiser sells infant formula for $ 2.2bn

Reckitt Benckiser has agreed to sell his dairy business in China to the business company Primavera, as it seeks to address its long-standing divisions.

The union values ​​the unit at $ 2.2bn. The UK retailer expects to receive about $ 1.3bn in revenue from the conference, which will be used to pay off debts, and will hold an 8% stake in the region, it said in a statement on Saturday.

The alliance will help Reckitt “rebuild growth and create long-term gains,” said their chief Laxman Narasimhan in a statement, adding that the group “is actively monitoring our work.”

Reckitt entered the baby-selling business in 2017 when he bought the American dairy company Mead Johnson for $ 13bn, forcing former CEO Rakesh Kapoor to restart the company in terms of consumer care. The device produces things like Enfamil.

However, it has been plagued by problems, possibly due to lower Chinese birth rates and local competition.

Last year, Reckitt took a $ 5bn discount on Mead Johnson’s acquisition, recording about one-third of its old book value.

In 2018, unemployment in the Dutch child-manufacturing industry left Reckitt unable to meet customer demands, knocking 70 million dollars into the company’s salaries and buying its value.

Martin Deboo, a researcher at Jefferies, said in March he thought those who owned shares in Reckitt “would like to stay abroad [of the China baby formula business] almost any price ”.

Reckitt expects to lose about $ 2.5bn due to sales in Primavera, as it re-celebrates intangibles, it added.

The distribution of infant formula across the company also saw a 7.4% decline in sales in the first half of 2021, compared to the previous year.

Under the agreement, Primavera, which has invested in Alibaba, Ant Group and ByteDance, will control Reckitt’s manufacturing plant in Nijmegen and Guangzhou in China.

Reckitt still has Mead Johnson and Enfa but Primavera will have permission to have unused monarchs in China.

Narasimhan, who replaced 2019, wants to change Reckitt’s career, which was strained at the end of Kapoor’s reign.

Its parallel revenue rose 4.1% in the first quarter of this year, he said in April, when the sale of herbs such as Lysol disinfectant rose.

Narasimhan said Reckitt was keen to grow some of its businesses in China, the largest market for its Durex condoms.

Fred Hu, founder and chairman of Primavera, said the deal would lead to a “strong partnership” with Reckitt.

The Chinese cake-making business based in Guangzhou employs about 3,000 people and generated 861 million pounds in annual payments until December.

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