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| An aisle of baby care products at a supermarket in Beijing. Provided to China Daily |
Conglomerate solidifies Chinese presence by taking out competition
Johnson & Johnson (China) Investment Co Ltd, the Chinese arm of the giant US consumer goods manufacturer, whose baby care products claim half of the Chinese market, said it has completed the acquisition of a local rival to consolidate its dominance in China.
The company didn't disclose the amount it paid for Shanghai Elsker for Mother & Baby Co Ltd. Industry sources said the acquisition would enable Johnson & Johnson to fend off potential competition that is eating into its market share.
"The transaction is an important strategic decision that has been made based on our continued confidence and long-term commitment to the China market as well as to the Chinese consumers," said Edward Zhou, managing director of personal care business, J&J's China consumer unit.
J&J will further develop the Elsker brand in its personal care business to complement the Johnson's baby franchise, Zhou said, and is "determined to make the brand even bigger a success".
The deal has obtained regulatory approval, according to Wang Xunbiao, a company spokesperson at J&J's China operation.
Founded in 2006, Elsker received an angel investment of 20 million yuan ($3.2 million) in 2007 and then was granted 5.5 million euros ($7.45 million) in funding from Edmond de Rothschild Group's private equity fund in 2009 and 2010, according to an announcement from Business Development Asia LLC, Elsker's PR agency.
Moling Chen, managing director at Edmond de Rothschild Private Equity China Fund, said they are proud to have supported the founding team at a time when believers were few, and that Elsker has consistently executed its growth strategy with impressive results under the leadership of Liu Xiaokun, the company's former general manager.
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