Ansell sells condom division to Chinese consortium for US$600 million
- Author: Zachary Reyes May 26, 2017,
May 26, 2017, 15:15
"That saw Ansell tell the market of the sale of the 'Sexual Wellbeing" or condom business to a Chinese consortium for $US600 million ($800 million), and a $US265 million (A356 million) on-market share buyback. He added that the sale will allow Ansell to concentrate on its core activity of selling to medical and industrial end markets. The business is the world's second-largest condom maker.
Ansell's association with condoms goes back to 1905 when Eric Norman Ansell acquired the condom machinery owned by his employer the Dunlop Pneumatic Tyre Company of Australasia.
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.
Ansell's brands include Jissbon, which sounds like James Bond in Chinese.
China's condom market is set to nearly triple to $5 billion by 2024 from 2015, according to a report by Transparency Market Research previous year.
Shares in Ansell climbed 4 percent on Thursday, their biggest daily gain in six months, while the broader Australian S&P/ASX 200 index was flat.
Ansell said while there was potential for good growth for condom sales in emerging markets it felt they would ultimately slow.
"We feel that Humanwell and Citic are committed to the space and are intending, as far as we know, to invest aggressively in the business", said Magnus Nicolin, chief executive officer of Ansell, in a conference call with analysts.
Subject to approvals, the transaction is expected to be completed by September 2017.
Ltd. and CITIC Capital China Partners III LP, a private equity arm of Chinese asset management giant CITIC, according to a Wednesday statement.