,HONG KONG, March 22 - British consumer goodscompany Reckitt Benckiser Group is considering sellingits infant formula business in Greater China, in a deal thatcould value the business at more than $2 billion, two peoplewith knowledge of the matter said. The group has hired Morgan Stanley to conduct astrategic review of its infant formula unit Mead Johnson inGreater China, the sources said, declining to comment as theinformation is confidential. A sale process could start in the second quarter after thebank gets initial feedback from potential buyers, which includeboth strategic and private equity firms, the sources said. They however cautioned no decision has been made and thatbusiness valuation could change due to the impact of COVID-19. Reckitt Benckiser did not immediately respond to a requestfor comment while Morgan Stanley declined to comment. The group announced the strategic review in February, sayingmultiple options were being explored. Its Greater China infant formula business represents 6% ofgroup sales, which were almost 14 billion pounds ($19.8 billion)in 2020, up 11.8% year-on-year, Reckitt Benckiser said at thetime. U.S.-headquartered Mead Johnson, which Reckitt Benckiserbought for $16.6 billion in 2017, runs a range of infant formulabrands including Enfamil, Enfapro and Lactum. Laxman Narasimhan, Reckitt Benckiser's chief executive, saidin February that challenges to the China business included HongKong's longer-than-expected border closure during COVID-19,local competition, a changing regulatory environment and lowerbirth rates in the country. Chinese consumers have been favouring imported infantformula since the country's 2008 baby milk contaminationscandal. The top four best-selling infant formula brands one-commerce platform JD.COM for example are all foreign. However, local brands are catching up fast with brands suchas Morgan Stanley-backed Feihe gaining significant market share. China imported 335,600 tonnes of infant formula in 2020,down 2.8% year-on-year, according to the Dairy Association ofChina. REUTERS
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