Brazil's Hypermarcas may sell diaper unit to Kimberly-Clark -source
SAO PAULO Oct 22 (Reuters) - Hypermarcas SA, the largest Brazilian producer of personal care goods, is in advanced talks to sell a unit that manufactures diapers to Kimberly-Clark Corp, sharpening the company's focus on pharmaceuticals, a source with direct knowledge of the matter said on Thursday.
The source, who declined to be identified because the negotiations are under way, declined to give a price tag for the transaction. A deal will be announced in coming days, the source added.
São Paulo-based Hypermarcas had hired financial advisers from Citigroup Inc, Bank of America Merrill Lynch and Banco Bradesco SA to find alternatives for the diaper unit, sources recently told Reuters. The alternatives included a potential spin-off, partnerships or might even involve an asset sale, according to a securities filing unveiled in early May.
According to the source, Hypermarcas wanted to exit the diaper market because performance was hobbled by the lack of scale, brand recognition and the rising cost of imported materials for the product amid a sharp drop in Brazil's currency, the real.
The diaper unit earned about 860 million reais ($220 million) in revenue last year, according to the filing. Hypermarcas is also the largest maker of over-the-counter medicines in Brazil.
Neither Hypermarcas nor Kimberly-Clarke had an immediate comment. ($1 = 3.9045 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Editing by Matthew Lewis)
© Thomson Reuters 2017 All rights reserved.