Consumer products maker Reckitt Benckiser Group plc has entered into a definitive agreement to shed its Infant Formula and Child Nutrition business in China (IFCN China) to investment firm Primavera Group for an enterprise value of $2.2 billion, a recent company release announced.

Under the terms of the transaction, Reckitt will retain 8% of shares in IFCN China. The firm expects the deal to generate about $1.3 billion in net cash proceeds. A comprehensive strategic review of IFCN China was initiated by Reckitt in February 2021.

“After a thorough review of IFCN China, we have found an excellent home for the business under the ownership of Primavera. As a result of this transaction, our Nutrition business going forward will have a better and more consistent growth and margin profile,” said Reckitt CEO Laxman Narasimhan in a statement.

Narasimhan added, “We remain committed to China with our Hygiene, Health and VMS portfolios. We are excited about the opportunities to grow our brands and expand our business in the future. China is Durex’s largest market and growing strongly and it is an important market for Dettol, Finish, and our VMS brands with significant potential for future expansion.”

The sale includes the IFCN China entity and its manufacturing plants in Guangzhou, China and Nijmegen, the Netherlands, as well as a royalty-free perpetual and exclusive license of the Mead Johnson and Enfa brands in China. Reckitt will remain the owner of the brands in the rest of the world.

“We look forward to a strong collaboration with Reckitt, to continue to build on the heritage and strength of the Mead Johnson brand. We have considerable experience investing and growing and expanding global brands in China. We are excited to support the business in its next phase of growth, leveraging our resources and local leadership,” said Primavera’s founder and chairman, Dr. Fred Hu, in the release.

The company expects the transaction to close in the second half of this year after consulting the Netherlands works council and meeting customary closing conditions.