Reckitt to sell baby formula biz in China

British consumer goods company Reckitt Benckiser Group Plc has agreed to sell its baby formula business in China to private equity group Primavera Capital Group for $2.2 billion as the company seeks to exit from China's infant formula sector.

Reckitt will retain an 8 percent stake in the infant formula and child nutrition business unit and expects net cash proceeds of about $1.3 billion.

The transaction is structured as a sale of the entirety of IFCN China, including the manufacturing plants in Nijmegen, the Netherlands, and Guangzhou, Guangdong province. It includes a royalty-free perpetual and exclusive license of the Mead Johnson and Enfa family of brands (including Enfinitas, Enfamil and Enfagrow) in China. Reckitt's infant formula business in the Chinese market accounts for 6 percent of its group sales, which rose by 11.8 percent on a yearly basis last year, according to Reuters.