P&G buys remaining stake in China
Wednesday, May 12, 2004 (Cincinnati):
Procter & Gamble Co said it will pay $1.8 billion to buy the remaining 20 per cent of its joint venture in China from its partner, Hutchison Whampoa China Ltd.
The venture sells shampoo, toothpaste and other P&G consumer products in China. P&G will now own all of what it deems a rapidly growing business in China. The deal is to be closed on June 18.
"Hutchison has been a very valuable partner in helping to build our business in China, and it is the right time for us to assume full ownership," said A G Lafley, P&G's chairman, president and chief executive.
P&G-Hutchison Ltd, a joint venture between P&G and Hutchison, began in 1988 as P&G started operations in mainland China.
Its sells a broad range of P&G products in China including shampoo and conditioners, laundry detergents, toothpaste, facial moisturisers and feminine care and baby care items.
Originally, P&G had a stake of 69 per cent in the business and Hutchison had 31 per cent. P&G increased its ownership to 80 per cent in 1997 and the two companies said they foresaw a buyout of the rest between 2007 and 2017.
Based on the venture's rapid growth, management said that a later buy-out would have cost substantially more. P&G officials said they expect the deal to have a minimal impact on earnings per share for the quarter that ends June 30. (AP)