{"id":117931,"date":"2021-03-22T10:42:35","date_gmt":"2021-03-22T10:42:35","guid":{"rendered":"https:\/\/precoinnews.com\/?p=117931"},"modified":"2021-03-22T10:42:35","modified_gmt":"2021-03-22T10:42:35","slug":"reckitt-benckiser-considers-over-2-billion-sale-of-mead-johnson-greater-china-sources","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/reckitt-benckiser-considers-over-2-billion-sale-of-mead-johnson-greater-china-sources\/","title":{"rendered":"Reckitt Benckiser considers over $2 billion sale of Mead Johnson Greater China: sources"},"content":{"rendered":"
HONG KONG (Reuters) – British consumer goods company Reckitt Benckiser Group is considering selling its infant formula business in Greater China, in a deal that could value the business at more than $2 billion, two people with knowledge of the matter said.<\/p> The group has hired Morgan Stanley to conduct a strategic review of its infant formula unit Mead Johnson in Greater China, the sources said, declining to comment as the information is confidential.<\/p>\n A sale process could start in the second quarter after the bank gets initial feedback from potential buyers, which include both strategic and private equity firms, the sources said.<\/p>\n They however cautioned no decision has been made and that business valuation could change due to the impact of COVID-19.<\/p>\n Reckitt Benckiser did not immediately respond to a request for comment while Morgan Stanley declined to comment.<\/p>\n The group announced the strategic review in February, saying multiple options were being explored.<\/p>\n Its Greater China infant formula business represents 6% of group sales, which were almost 14 billion pounds ($19.8 billion) in 2020, up 11.8% year-on-year, Reckitt Benckiser said at the time.<\/p>\n U.S.-headquartered Mead Johnson, which Reckitt Benckiser bought for $16.6 billion in 2017, runs a range of infant formula brands including Enfamil, Enfapro and Lactum.<\/p>\n Laxman Narasimhan, Reckitt Benckiser\u2019s chief executive, said in February that challenges to the China business included Hong Kong\u2019s longer-than-expected border closure during COVID-19, local competition, a changing regulatory environment and lower birth rates in the country.<\/p>\n Chinese consumers have been favouring imported infant formula since the country\u2019s 2008 baby milk contamination scandal. The top four best-selling infant formula brands on e-commerce platform JD.COM for example are all foreign.<\/p>\n However, local brands are catching up fast with brands such as Morgan Stanley-backed Feihe gaining significant market share.<\/p>\n China imported 335,600 tonnes of infant formula in 2020, down 2.8% year-on-year, according to the Dairy Association of China.<\/p>\n