By Cliff Peale
The Cincinnati Enquirer

Procter & Gamble Co. will pay $1.8 billion to buy out its joint-venture partner in China

P&G, with Chinese sales approaching $2 billion a year and growing fast, said Tuesday it had a provision in its contract with Hutchison Whampoa China Ltd. to buy out the remaining 20 percent by 2017. But it chose now because "a later buyout would likely have occurred at a significantly higher price," the company said.

P&G has said China is the fastest growing of its developing markets. Last week, chairman and chief executive A.G. Lafley called it "a rocket" with sales increasing significantly faster than P&G's overall sales.

Those developing markets are among the keys to P&G's overall growth, which has supported healthy results in P&G's quarterly profits and stock price.

P&G employs mostly native Chinese in the operation. In Guanzhouheadquarters, it employed about 3,200 people as late as last year.

Procter established the joint venture with Hutchison Whampoa in 1988 as it began selling its stable of consumer goods in China. P&G originally had a stake of 69 percent, and increased that to 80 percent in 1997.

"Hutchison has been a very valuable partner in helping to build our business in China, and it is the right time for us to assume full ownership," Lafley said in a news release.

E-mail cpeale@enquirer.com