Unilever Expands Personal Care Range With GBP3.7 Billion Buy
27 September 2010 - 10:40AM
Dow Jones News
Anglo-Dutch consumer goods giant Unilever PLC (UN, UL) said
Monday it has bought U.S. rival Alberto Culver Co (ACV) for GBP3.7
billion in cash, adding Alberto VO5, TRESemme and Simple to its
portfolio of personal care brands.
The company said the deal would make Unilever the world's number
one seller of hair conditioning products, the second-largest in
shampoo and the third-largest in styling. The acquisition also
enhances its hair care presence in the U.S., Canada, the U.K.,
Mexico and Australasia, "all of which will be significant hair care
markets for years to come," it said.
Alberto Culver's sales in the year to June were $1.6 billion,
with operating profit of more than $250 million. The company is
part-owned by the family of founder Leonard Lavin.
Unilever Chief Executive Paul Polman said the acquired
brands--which also include Nexxus and St. Ives--will complement
Unilever's existing brands like Dove, Clear and Sunsilk in hair
care and Pond's and Vaseline in skin care.
"Personal Care is a strategic category for Unilever and growing
rapidly," said Polman. "Ten years ago it represented 20% of our
turnover; strong organic growth has driven it to now reach over
30%, with strong positions in many of the emerging markets."
Investec analyst Martin Deboo described it as a "strategically
sensible deal," that increases Unilever's "category authority in
hair care."
He added that while the price looks full, Unilever's size means
it is effectively a bolt-on deal and will generate strong
synergies. The price also compares favourably with the price rival
Reckitt Benckiser PLC (RB.LN) is paying for condom-maker SSL
International PLC (SSL.LN), he said.
Unilever confirmed the deal would deliver "significant
synergies" and will be accretive to earnings in the first full year
of ownership.
One criticism of the deal is that it will bulk up Unilever's
developed market presence while doing little for emerging markets.
Investec's Deboo noted, however, that Unilever's emerging market
distribution powers could rapidly change the sales profile of the
Alberto Culver brands.
The market welcomed the deal and at 0744 GMT, Unilever's shares
were up 48 pence, or 2.7%, at 1841 pence.
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278;
michael.carolan@dowjones.com
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