K7, the company that makes Alka-Seltzer and other energy pills, has raised $4.5 billion in a Series A round led by Alibaba Group Holding Ltd.
and UBS Group AG, a major Chinese investor in energy.
The funding, led by UBS and the China Investment Corporation, comes as the Chinese government has rolled out a series of regulations aimed at curbing the sale of high-end energy products.
The government also announced plans last month to restrict online shopping on energy products, a move that has caused concern among investors.
“We have no intention of doing anything that could be seen as anti-competitive,” said Amit Agarwal, chief executive of K7.
“The government is trying to push the energy sector into a corner where it will become a monopoly.
We are just trying to provide a solution that would be beneficial for consumers.”
The new funding is the largest from a single Chinese investor.
K7 has raised a total of $10.4 billion from private investors in its nearly 30-year history, according to the company.
The money is expected to help the company boost its revenues, which have slumped in recent years as consumers turn away from energy-intensive products such as kerosene and natural gas.
The company also said it would increase the production of kerosol-based energy-absorbing products, which account for about 25 percent of its business.
“These are the new normal,” Agarwalsaid.
“They are coming from a new generation, who have the technology to do this and the technology is now coming from China.
We have to keep up with them.”
Agarwal said that while he doesn’t know how much kerosine will be available in the United States, he expects it will be $50 per bottle.
He expects that the company will be able to make kerosines for around $200 per bottle at most.
“There is no question about the strength of the kerosin business in the U.S. and the market will grow,” he said.
“That’s what we are trying to focus on right now.”
K7 said that it would continue to invest in technology, including in energy-efficient products, to help it survive in the coming years.
The Chinese government also wants to make energy more affordable and efficient, which has led to a sharp rise in energy prices.
The country is now the world’s biggest consumer of energy, consuming nearly 40 percent of the world energy output and earning nearly $4 trillion a year.
Energy prices in China have shot up by an average of 10 percent per year since the start of the year.