Reckitt to sell its infant formula business in China for US$2.2 billion to Primavera Capital Group

June 6, 2021, 12:21:46 PM

Reckitt Benckiser Group plc ("Reckitt") announces that it has entered into a definitive agreement to sell its Infant Formula and Child Nutrition business in China1 ("IFCN China") to Primavera Capital Group ("Primavera") for an implied enterprise value of US$2.2 billion. Reckitt will retain a shareholding in IFCN China of 8%2 and anticipates net cash proceeds to be approximately US$1.3 billion.

The transaction follows a comprehensive strategic review of IFCN China announced in February 2021. The transaction is structured as a sale of the entirety of IFCN China, including the manufacturing plants in Nijmegen, the Netherlands and Guangzhou, China. It includes a royalty-free perpetual and exclusive license of the Mead Johnson and Enfa family of brands4 in China. Following completion of the transaction, Reckitt will continue to own the Mead Johnson and Enfa family of brands globally and will operate those brands in the rest of the world.

The transaction is subject to consultation with Reckitt's works council in the Netherlands, which Reckitt will now initiate. Reckitt will also engage with its other relevant employee unions in relation to the transaction. Subject to the Netherlands works council consultation and the satisfaction of customary closing conditions, completion is expected in the second half of 2021.

Reckitt expects to incur cash tax costs of around £300 million and transaction and other costs of around £200 million. The net proceeds will be used to reduce net debt and would have lowered the December 2020 net debt / adjusted EBITDA ratio by around 0.2x to 2.2x.

As at December 2020, IFCN net assets totalled £8.8 billion on a global basis. Following the definitive agreement to sell IFCN China, Reckitt's IFCN net assets have been separated geographically for accounting purposes; with £3.4 billion allocated to China and £5.4 billion allocated to North America and the rest of the world. As a result of the sale, Reckitt expects to incur a net loss of around £2.5 billion principally relating to the re-measurement of goodwill and intangible assets for IFCN China.


About Collabrium Partners


Collabrium Partners is a Chinese leading independent investment banking firm focused on providing financial advisories on mergers & acquisitions, strategic planning, restructuring, private placement, independent opinions to corporations, financial institutions, public service agencies, and others. For more information, visit