Johnson & Johnson is to form a joint venture with the Beijing-based cosmetics maker Dabao. Wang Wenbing, a senior manager at Dabao, said he ¡°did not categorically deny the deal,¡± but did not wish to make any further comment. The Shanghai-baseOriental Morning Post reports.
The reported takeover deal is part of a trend in which foreign giants are acquiring Chinese domestic cosmetics brands to expand into the nation¡¯s middle- and low-end markets. The same reason could explain L¡¯Oreal¡¯s acquisition of Little Nurse in 2003, a deal that shook China¡¯s cosmet industry.
The acquisition of Dabao would provide Johnson & Johnson with a product line and distribution channel in the low-end market.
Johnson & Johnson will offer ¡unconditional accommodation¡¯ for all of Dabao¡¯s disaed employees in the joint venture, offering them employment contracts without fixed terms.
But accommodation for non-disabled employees, especially those who are senior or have retired, is still to be decided. The deal has yet to be approved by the relevant government departments.
Dabao, most of whose employees are handicapped, focuses mainly on low- and medium-end products. No financial details were provided yet.
Source : Beijing Today