Karex Bhd is eyeing to buy Medical-Latex (Dua) Sdn Bhd (MLD) from Beiersdorf AG for RM13mil.
Karex Bhd is the world’s largest condom-maker.
It would allow Karex to acquire MLD’s own brand manufacturing product, under the Enjoyable Safe Pleasure (ESP) brand.
“Karex believes that it will complement Karex’s existing brands as well as the recent acquired One brand in the markets that Karex is going into. Karex believes it can grow ESP further, taking advantage of its current network,” the company said in its filing with Bursa Malaysia.
Karex’s three factories — located in Johor, Selangor and Thailand — has a manufacturing capacity of 4 billion pieces per annum.
MLD, located in Senai, has the capacity of producing 165 million pieces of condoms per year.
The purchase consideration of RM13mil considered MLD’s net asset value, the revaluation gain of leasehold land and buildings of RM4.4mil and its future growth prospects.
Beiersdorf has appointed MLD as the exclusive supplier of all condoms specified in the supply agreement, which is on a five-year renewal basis.
Under the term of the supply agreement, Karex has a right of first refusal to any proposed disposal of Beiersdorf’s condom brands Duo and Harmony, which are made for the European and Latin American markets.
The company expects to complete the acquisition by early October.
Karex shares shed 27 sen to close at RM3.09 on Wednesday.