The story appears on

Page A8

May 26, 2017

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Consumer

Chinese group buys condom producer

A Chinese consortium is buying Ansell Ltd’s condom division, the world’s No. 2 condom maker, for US$600 million, betting on surging demand in China as more emphasis is placed on public health education.

The Australian firm, which put its oldest but smallest division up for sale last August, said yesterday that it has reached an all-cash deal with China’s Humanwell Healthcare Group Co 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 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 No. 1 in the world, it is a business with a dramatically different go-to-market in terms of marketing spend,” Chief Executive Magnus Nicolin said.

“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.”

The company expects to receive net after-tax proceeds of US$529 million from the sale, and the proceeds will help fund a US$265 million buyback of 10 percent of shares on issue as well as future acquisitions.

The business sold at nearly 16 times earnings from 2016.

“They’ve sold what was a smallish part of their overall business for a very good price, we think it’s a good move,” said Anton Tagliaferro, investment director at Investors Mutual Ltd, the biggest holder of Ansell stock.

According to a 2016 Transparency Market Research report, China’s condom market is seen growing at 12 percent a year in the 2016-2024 period from a US$1.8 billion market in 2015 to over US$5 billion by 2024. Ansell said it sees condom sales growth there moderating in the future.

The transaction is set to complete at the end of September.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend