A Chinese consortium is buying Ansell Ltd's condom division, the world's no. 2 condom maker, for $600 million. As Sonia Legg reports, it's betting on surging demand in China as sex becomes less of a taboo subject and more emphasis is placed on public health education.
There are big changes going on in China. The easing of the one child policy is one of them - the subject of sex is another. It's no longer such a taboo subject and as a result public health education has risen up the agenda. Any growth sector is a business opportunity - and two Chinese firms have seized it. Humanwell Healthcare and CITIC Capital China Partners have splashed out $600 million on the world's number 2 condom maker. Ansell's Jissbon brand is particularly popular in China - as it sounds like James Bond in Chinese. It has other makes too - the new buyers well aware that foreign brands have more appeal after some scandals involving cheap Chinese products. For Ansell, condoms were never a core division - their focus now is on industrial and medical rubber products. Proceeds from the sale will help fund a $265 million share buyback and future acquisitions. Regulatory approval is needed but the deal is expected to be completed by October even though China's falling birth rate has the government worrying about an ageing workforce.