Cincinnati, May 12: Procter & Gamble Co. said it will pay USD 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, yesterday.
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.
Bureau Report