UK consumer goods group Reckitt Benckiser said it was selling its baby formula business in China to the private equity firm Primavera for $2.2bn and would incur a £2.5bn net loss on the deal.
The maker of Dettol disinfectant Reckitt said it expected to receive about $1.3bn in cash from the deal which it will use to pay down debts, and will keep an 8% stake in the unit, it said in a statement on Monday. As a result of the sale, the company expects to incur the net loss due to the re-measurement of goodwill and intangible assets.
The sale follows a review of the business announced in February and includes manufacturing plants in Nijmegen, the Netherlands and Guangzhou, China.
Reckitt expects to incur cash tax costs of around £300m and transaction and other costs of around £200m.
