Monster Worldwide plans sale of Chinese unit

Monster Worldwide plans sale of Chinese unit

Summary: U.S. online job search company plans to sell its Chinese entity, which it fully acquired in 2008, as part of its restructuring program.

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TOPICS: IT Employment, China
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As part of the online job search company's restructuring plans, Monster Worldwide will sell off its Chinese business unit, ChinaHR, which it fully acquired in 2008.

In an SEC filing Thursday, Monster said its restructuring exercise is expected to curb losses of about US$130 million. Besides the sale of ChinaHR, its plans include "evaluating all options" for developing markets and "substantially curtailing" losses incurred in these markets. It will also redeploy its expenses into marketing and sales in its core markets.

Monster completed the acquisition of ChinaHR in October 2008 when it bought over its remaining 55 percent stake for US$174 million. It bought the initial 40 percent stake in the Chinese job site for US$50 million in February 2005, and increased its stake to 44.4 percent in March 2006 for US$19.9 million.

However, even selling off ChinaHR might not bring much value to Monster. A Businessweek report Thursday quoted Randle Reece, an analyst at Avondale Partners, who noted ChinaHR had lost "most of its share" of the Chinese online job search market.

"Any consideration [Monster] receives for disposing of ChinaHR is likely to be insignificant," Reece added, noting the final stake which Monster paid for the Chinese unit valued the business at US$300 million.

The U.S. company had written down goodwill of US$216 million in the third quarter, which represented most of ChinaHR's US$262 million in goodwill, he said. Goodwill is the amount arising when a company's fundamental business is lower than the value paid.

Topics: IT Employment, China

Liau Yun Qing

About Liau Yun Qing

The only journalist in the team without a Western name, Yun Qing hails from the mountainy Malaysian state, Sabah. She currently covers the hardware and networking beats, as well as everything else that falls into her lap, at ZDNet Asia. Her RSS feed includes tech news sites and most of the Cheezburger network. She is also a cheapskate masquerading as a group-buying addict.

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