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
Unilever NV (NYSE:UN)
Historical Stock Chart
Von Jun 2024 bis Jul 2024 Click Here for more Unilever NV Charts.
Unilever NV (NYSE:UN)
Historical Stock Chart
Von Jul 2023 bis Jul 2024 Click Here for more Unilever NV Charts.