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    RB.   GB00B24CGK77

RECKITT BENCKISER GROUP PLC

(RB.)
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Delayed Quote. Delayed London Stock Exchange - 09/22 11:35:04 am
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Reckitt Benckiser considers over $2 billion sale of Mead Johnson Greater China: sources

03/22/2021 | 04:34am EDT
FILE PHOTO: Products produced by Reckitt Benckiser; Vanish, Finish, Dettol and Harpic are seen in London

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.

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.

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.

They however cautioned no decision has been made and that business valuation could change due to the impact of COVID-19.

Reckitt Benckiser did not immediately respond to a request for comment while Morgan Stanley declined to comment.

The group announced the strategic review in February, saying multiple options were being explored.

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.

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.

Laxman Narasimhan, Reckitt Benckiser's chief executive, said in February that challenges to the China business included Hong Kong's longer-than-expected border closure during COVID-19, local competition, a changing regulatory environment and lower birth rates in the country.

Chinese consumers have been favouring imported infant formula since the country's 2008 baby milk contamination scandal. The top four best-selling infant formula brands on e-commerce platform JD.COM for example are all foreign.

However, local brands are catching up fast with brands such as Morgan Stanley-backed Feihe gaining significant market share.

China imported 335,600 tonnes of infant formula in 2020, down 2.8% year-on-year, according to the Dairy Association of China.

 

(Reporting by Kane Wu in Hong Kong, additional reporting by Pamela Barbaglia in London; Editing by Emelia Sithole-Matarise)

By Kane Wu


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CLASS III MILK FUTURES (DC) - CMG (ELECTRONIC)/C1 0.06% 16.61 End-of-day quote.5.25%
CLASS IV MILK?FUTURES (GDK) - CMG (ELECTRONIC)/C1 0.12% 16.42 End-of-day quote.19.07%
DRY WHEY?FUTURES (DY) - CMG (ELECTRONIC)/C1 0.09% 53.1 End-of-day quote.20.14%
MORGAN STANLEY 2.93% 101.05 Delayed Quote.43.44%
NONFAT DRY MILK FUTURES (GNF) - CMG (ELECTRONIC)/C1 0.00% 128 End-of-day quote.12.73%
RECKITT BENCKISER GROUP PLC -0.74% 5875 Delayed Quote.-9.52%
S&P GSCI CLASS III MILK (USD) -0.99% 128.9294 Delayed Quote.-1.94%
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Financials
Sales 2021 13 140 M 17 893 M 17 893 M
Net income 2021 765 M 1 042 M 1 042 M
Net Debt 2021 8 418 M 11 463 M 11 463 M
P/E ratio 2021 -43,6x
Yield 2021 2,95%
Capitalization 41 961 M 57 318 M 57 139 M
EV / Sales 2021 3,83x
EV / Sales 2022 3,79x
Nbr of Employees 43 500
Free-Float 96,7%
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Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 5 919,00 GBX
Average target price 7 062,05 GBX
Spread / Average Target 19,3%
EPS Revisions
Managers and Directors
Laxman Narasimhan Group Chief Executive Officer & Executive Director
Jeff Carr Chief Financial Officer & Executive Director
Christopher A. Sinclair Chairman
Aditya Sehgal Chief Operating Officer-Health
Nicandro Durante Senior Independent Director
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