HONG KONG (Reuters) - Johnson & Johnson (JNJ.N) has bought top Chinese cosmetics firm Beijing Dabao, the firm said on Wednesday, wrapping up a deal estimated at more than $300 million and aimed at expanding the U.S. giant’s share of a booming but fractured market.
Johnson & Johnson, which vies with the likes of Unilever (ULVR.L) to sell cosmetics and healthcare products to a retail consumer market growing at double digits annually, won a bidding war with Avon (AVP.N) and Unilever and will pay 2.3 billion yuan ($337 million) for Dabao, state media has reported.
The U.S. firm did not disclose the financial terms for the completed acquisition on Wednesday.
China’s fragmented cosmetics and healthcare market hosts more than 3,500 distinct brands, local newspapers have reported.
But global consumer and healthcare product firms such as Procter & Gamble (PG.N) are nonetheless pondering acquisitions in China to shore up and expand market share, with rip-roaring economic growth creating a newly monied middle class.
Underscoring the market’s attraction, L’Oreal bought popular local brands Mini Nurse and Yue Sai in 2004.
Dabao, a firm owned by the Beijing Sanlu Factory, cranks out a variety of self-branded, herbal cosmetics from skin cream to hair products. It exports to more than 30 countries, including the United States and Japan, according to its Web site.
In 2006, the firm posted a meager 41.7 million yuan ($6.1 million) of net profit on sales of 675.2 million, the official China Daily has reported.