Colgate-Palmolive Co. (CL) has agreed to buy the Sanex personal
care brand from Unilever PLC (UL, ULVR.LN) for EUR672 million ($940
million), strengthening its personal-care business in Europe.
In connection with the deal, the world's largest toothpaste
maker by sales and market share also agreed to sell Unilever its
laundry detergent business in Colombia for $215 million. Latin
America is Colgate's biggest market by sales.
Colgate said the move is in line with its focus on its
higher-margin oral care, personal care and pet nutrition
businesses. The company is wrestling with a recent spike in
commodity costs worldwide that is putting pressure on a number of
industries. Consumer-product companies, facing weak demand in the
U.S. and other developed markets, are being put in the tough
position of raising prices to offset costs.
Unilever, meanwhile, was required to dispose of the deodorant
and bathcare products business in order to get European Commission
clearance of its $1.6 billion purchase of Sara Lee Corp.'s (SLE)
personal care unit.
Colgate said Sanex had sales last year of EUR187 million ($260
million), primarily in Western Europe. Companywide, Colgate
generated $15.56 billion in sales during the same period.
The buyer said it expects the two deals to increase its earnings
by about 4% this year, due to a one-time gain on the detergent
business. It sees the transactions boosting its profit about 1% in
2012 on growth and efficiencies from Sanex.
Colgate shares closed Tuesday at $78.43 and were inactive
premarket. Unilever shares recently traded up 14 pence, or 0.8%, to
1824 pence in a higher London market.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com