On Saturday, Reckitt Benckiser Group Plc., a British consumer goods manufacturer headquartered in Slough, UK, had issued a statement saying that it had been brewing off an option to sell off its Infant Formula and Child Nutrition (IFCN) business in China to a China-based global investment firm Primavera Capital Group in a deal that would value the entity at an approximated $2.2 billion.
On top of that, according to an emailed statement of Reckitt Benckiser, the British manufacturer of Lysol disinfectant and Dettol soap would hold an 8 per cent stake in IFCN China arm, while Reckitt was anticipating an influx of roughly $1.3 billion in net cash from proceedings of the sale.
Nonetheless, Reckitt would stomach a net loss of £2.5 billion on its latest divestiture of IFCN China unit, largely because of an error in evaluation of goodwill and intangible assets, the British firm acknowledged.
However, a media topline had unveiled late on March this year that Reckitt had been contemplating a sale of its IFCN unit in China.
Reckitt to sell-off loss-making China baby formula business
In factuality, a sale of Reckitt’s IFCN China unit had marked off an Eagle’s eye evaluation of IFCN China business launched in February this year alongside prospects of overseas investments in China on a broader spectrum, since IFCN China had witnessed a flurry of fierce competition from China’s home-grown baby formula brands alongside a sluggish sale due to a slow birth-rate in the world’s most populous country.
Nevertheless, Reckitt executives had blamed a Hong Kong border closure due to the pandemic situation behind a sluggish sale of IFCN China business which it had acquired back in 2017 as a part of a $16.6 billion takeover of US-based Mead Johnson.