Chinese Cosmetics Giant Grows Family With Baby-Care Brand Purchase

(Beijing) — Leading Chinese cosmetics maker Jahwa is buying Tommee Tippee — Britain’s top baby-care product maker — for nearly $300 million, further opening the brand’s access to China’s populous market.

Abundant Merit Ltd., an overseas unit of Shanghai Jahwa United Co. Ltd., will acquire 100% of Cayman A2 Ltd., which owns Tommee Tippee and other brands of baby food and care products, for about $293 million.

Shanghai-listed Jahwa will take over Cayman A2 from Jahwa’s parent company, Shanghai Jahwa Group, which bought the assets through its overseas subsidiary, Arianna Global Ltd., in July 2016 for 1.9 billion yuan ($280 million).

The case is still subject to approval from both regulators and Jahwa’s shareholders, the company said.

Jahwa United said it hadn’t bought the firm earlier because as a public company, Jahwa United needed more merger and acquisition (M&A) regulatory approval than a private one. The company wanted to launch the foreign-branded product as soon as possible, and chose to use the private Jahwa Group as the buyer to facilitate this.

It can take public companies more than six months longer to complete acquisitions than it does private firms, an M&A lawyer told Caixin.

Facilitated by the deal that its parent company completed last year, Jahwa became the exclusive distributor of Tommee Tippee in China three months ago.

Tommee Tippee is Britain’s top baby-care brand, occupying a market share of 40%, which also has a presence in the U.S., Australia and New Zealand. The deal will help introduce the famous baby-care brand to China and help the Chinese company to expand overseas as well, Jahwa said in a statement Friday.

After having launched its self-developed baby-care brand, Giving, Jahwa hopes its second purchase will take forward its ambitions in the fast-growing China market. In 2015, sales of baby-care products reached 13.2 billion yuan, and are expected to rise 15% annually between 2015 and 2020, Jahwa said.

The domestic market might be larger than Jahwa’s estimates, after the country eliminated the one-child policy in 2015, which has helped to drive a renewed baby boom.

Shares of Jahwa United dropped 1.26% to 28.16 yuan on Monday.

Contact reporter Coco Feng (renkefeng@caixin.com)