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Revlon, Inc. Message Board

  • turd.trader turd.trader Mar 28, 2007 10:39 AM Flag

    Beijing Dabao Deal "Cosmetics"

    Good or Bad for REV ???

    BEIJING, Mar 28, 2007 (SinoCast China Financial Watch via COMTEX) --
    Johnson &Johnsonhas purchased a 100 percent stake in Beijing Dabao Cosmetics Co., Ltd.,
    a local popular cosmetics producer, rumors said.Dabao has been sold on the China Beijing Equity Exchange since February
    27,2007,and was just erased from the exchange's website on March 26, signaling
    that it has found the buyer.Though it has not released who has won the bid, Johnson & Johnson is
    likely tobethe winner, told sources close to the deal. Still, they did not give the
    price and other details.Engaged in the research and production of skincare, hair- care, perfume
    andothercosmetics products, Dabao put itself for sale at a price of CNY 2.3
    billion. The price is believed to be too high for homegrown peers and onlyforeignbrands can afford it.

    As scheduled, if the seller receives a single intention by March 26, it
    willreachthe agreement directly with the bidder. If it receives more than one
    intentions, the seller will select a winner based on the conditions it
    offered.Ifno intention comes, the deal will be extended every five working days
    untilitis sealed.

    Several foreign giants, including Johnson & Johnson, Avon and Unilever,
    haveshowninterest in the Beijing company.

    Johnson & Johnson China declined to comment on the rumor.The US personal-care giant since last August has contacted Dabao for the
    100percentstake, earlier reports said. But the buyer denied. They eventually
    failed to come to an agreement due to the disagreements on how to deal
    withDabao'sstaff, according to the reports.

    In Dabao's 100 percent stake, 83.42 percent is state equity and the rest
    isownedby its staff. A huge amount of deaf and blind staff will hence be a main
    problem for any bidder to face after acquiring the company.Unilever, who traces its history in China back to the 1920s, early this
    monthwasreported to participate in the bid as the only rival to compete against
    Johnson & Johnson.Currently, Unilever runs a wide range of brands, such as Lux, Dove,
    Hazeline,Pond's,Omo, Comfort, Zhonghua, Lipton, Knorr and Wall's, in the 1.3-billion
    population nation.Dabao required any bidder to offer a bank guarantee worth up to CNY 2.3
    billion,acondition difficult for all bidders to follow. The deal is hence believed
    noteasyfor Unilever to win.

    But the European foods, home care and personal care manufacturer has been
    deeplyattractedby the potentially big cosmetic market in China thanks to the know-how
    of running the Zhonghua Toothpaste here.To bid for Dabao, Unilever is likely to give up the plan of buying into
    NafineChemicalIndustry Group Co. Based in the central province of Shanxi, Nafine
    Group runs one of China's best-known washing powder brands KEON.The two have de facto talked for several times.

    China's cosmestics market has been regarded a bonanza for several foreignpersonal-carebrands.

    France-based L'Oreal years ago acquired Mininurse, a popular brand who has
    erect280,000outlets across the country. Germany's Beiersdorf, the owner of Nivea
    brand, has joined hands with C-Bons Group, as well.Registered in Hong Kong, C-Bons has been present in personal care, real
    estateandpharmaceutical. The hair care brands in the mainland, its main profit
    resources, are Slek and Maestro.(USD 1 = CNY 7.73)

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