Chinese group buys world's No.2 condom maker for $600 million
Staff Writer | May 25, 2017
A Chinese consortium is buying Ansell's condom division, the world's No.2 condom maker, for $600 million.
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The Australian firm, which put its oldest but smallest division up for sale last August, said it had reached an all-cash deal with China's Humanwell Healthcare Group and CITIC Capital China Partners.
Ansell's brands include Jissbon, which sounds like James Bond in Chinese, and it is the second-largest maker in China behind Reckitt Benckiser which owns Durex.
It also competes with large local brands Donless, Double Butterfly and Gobon.
Foreign brands tend to have more of a cachet in China after some scandals involving cheap Chinese products.
For Ansell, however, it made sense to let go of a non-core division that comes with hefty marketing costs to focus on industrial and medical rubber products.
"It is our only consumer business, it is the only business where we're not number one in the world, it is a business with a dramatically different go-to-market in terms of marketing spend," Chief Executive Magnus Nicolin told investors on a conference call.
"The fact that we can now focus a little bit more narrowly on hand-and-body protection in both industrial and medical settings will give us a stronger platform, if you will, from which to lead the industry," he said.
The company expects to receive net after-tax proceeds of $529 million from the sale, and proceeds will help fund a $265 million share buyback of 10 percent of shares on issue as well as future acquisitions.
The business sold at nearly 16 times earnings from 2016. ■ What to read next
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