Business

Reckitt Benckiser considering selling its China subsidiary Mead Johnson for $2B

British consumer goods company Reckitt Benckiser is considering selling its infant formula-(Baby Milk)  business in China in a deal that could exceed $2 billion, and the company has hired Morgan Stanley to conduct a strategic review of Mead Johnson’s infant formula company.

The sale is expected to start in the second quarter after the bank gets the initial reactions from buyers, which include private equity and strategic companies, but sources reported that no decision has been made on the company yet and its valuation may vary depending on the effects of the Covid-19 epidemic.

Mead Johnson’s infant formula business in China accounts for 6% of the Reckitt Benckiser Group’s total sales, which was around £14 billion ($19.8 billion) in 2020, up 11.8% year-on-year. Mead Johnson, which is headquartered in the United States, manages a large group of infant formula brands around the world such as Enfamil, Enfapro and Lactum, which were acquired by Reckitt Benckiser in 2017 for $16.6 billion.

The company’s sales of infant formula recently suffers from many difficulties in China, the most important of which are the prolonged border closures, local competition and low birth rates in the country, in addition to that in recent years, in addition to that, in recent years, consumers in China preferred imported infant formula over locally produced infant formula after the country’s 2008 infant formula contamination scandal, for example, the top four best-selling infant formula brands on the JD.com e-commerce platform were from foreign sources.

Related Articles

Back to top button