Top Biz News

Johnson & Johnson said to take over Dabao

By Li Xinran (Shanghai Daily)
Updated: 2007-04-10 14:52

Johnson & Johnson has taken overBeijing-based Dabao Cosmetics Co, China's biggest skincare company, according to a newspaper report published today.

Related readings: Dabao sale inflames debate over local brands

The two parties are reported to have signed an agreement on March 27 on the purchase of the company, theShanghaiMorning Post said.

Johnson & Johnson's takeover was no surprise to industry insiders, since Dabao, which has had the biggest domestic skincare sales for eight consecutive years, set a series of critical limitations on potential buyers to exclude them from bidding, according to the newspaper.

Dabao set out a takeover price of 2.3 billion yuan (US$300 million) in the Beijing Equity Exchange last month and said that potential buyers must own globally or domestically established cosmetics brands. The company should also have registered capital of more than 20 billion yuan and be able to produce out a bank guarantee for the bidding price.

Unilever, Avon and other potential competitors were excluded from the competition, since they were not able to prepare bank guarantees in such a short time, the newspaper said.

Dabao was established in 1999, based on the restructured state-owned Beijing cosmetic factory. Its Dabao product line has been popular in China since 1985.