Unilever, Colgate-Palmolive ‘consider bidding for Chinese consumer-product company for up to US$1 billion’
- Citigroup, sources say, is advising on the possible sale of Weimeizi as mega cross-border deals slow
- Global conglomerates continue to see China as a key market despite trade-war tensions
Global consumer conglomerates including Colgate-Palmolive, Unilever and Church & Dwight are considering bidding for the Chinese consumer-product company Weimeizi in an effort to increase their presence in the world’s largest market for consumer products, according to sources with knowledge of the matter.
Weimeizi, based in Guangzhou, China, makes high-end dental speciality products including toothpaste and toothbrushes under the Saky brand. Saky had sales of about US$3 billion in 2015, according to the Weimeizi website.
The company has hired Citigroup to sell the business for up to US$1 billion, according to the sources, who asked not to be named because they are not authorised to speak publicly about the sale. They said that BDA Partners, a New York-based investment bank, is advising one of the potential buyers.
Weimeizi, which was founded in 2006, is backed by venture capital firms including Hong Kong-based Orchid Asia and Shanghai-based Eastern Bell.
Representatives of Colgate-Palmolive, Citigroup and Orchid Asia declined to comment. The other firms did not respond to requests for comment.
The possible sale comes as cross-border deals have slowed in China amid an escalating trade war with the US. The two nations have imposed rounds of tariffs on each other’s goods worth tens of billions of dollars since July. The US has threatened duty on US$200 billion more in Chinese goods.
The friction and increasing hostility between the world’s two largest economies have sent chills among the business community and driven down the volume of merger deals.
Colgate-Palmolive, Church & Dwight and Unilever have presences in China already, but the interest in purchasing Weimeizi, while in an early stage, shows that – despite the fallout from trade frictions – companies with a global reach continue to build share in one of the world’s most important markets.
The mainland oral-care market of dental equipment and related products and services is expected to grow to more than US$57.7 billion by 2020, according to data compiled by the Hong Kong Trade Development Council.
In an effort to bring international standards to dental hygiene to China, Weimeizi has also worked with Rutgers University in New Jersey to establish the first oral hygiene research and development centre, according to the company’s website.
Additional reporting by Eric Ng