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Shiseido to Buy Out Former Joint Venture Partner in China

Shiseido and Hong Kong-based Dah Chong Hong sign deal.

TOKYO — Shiseido said Friday it intends to buy out one of its former partners in China in a deal that will cost 500 million Hong Kong dollars, or $64.3 million at average exchange.

This story first appeared in the May 10, 2010 issue of WWD.  Subscribe Today.

Shiseido and Hong Kong-based Dah Chong Hong Ltd. formed a 50-50 venture in 1998 to sell Shiseido brand cosmetics and other branded cosmetics in Hong Kong, Macau and China’s Guangdong Province.

The Japanese company said it plans to buy Dah Chong Hong’s 50 percent stake by the end of June. The joint-venture company, Shiseido Dah Chong Hong Cosmetics Ltd., or SDC, will become a fully owned subsidiary of Shiseido.

The company represents a small portion of Shiseido’s overall business in China. Shiseido said SDC represents just 2 percent of the company’s consolidated sales for the year ended March 31 so the financial impact of the deal is expected to be minimal.