GERMANY. Procter & Gamble announced today it had reached agreement with Wella’s family owners to buy their majority stake in a total €6.5 billion deal that will create a new force in travel retail perfumery. P&G, whose interest in buying Wella was first reported a month ago, said it would now launch an offer to remaining shareholders.
P&G said in a statement it would offer €92.25 for each of 44.1 million ordinary shares in Wella and €61.50 for 23.38 million non-voting preference shares. Wella’s share price climbed on the news, with investors hoping to profit from the 22% premium P&G said it will pay per voting share. Consumer products group Henkel, also seen in the race for Wella, is expected to make a profit on its Wella stake acquired this month.
This deal is subject to normal regulatory review and government approvals in various markets including the EU and US. “Wella is a leading beauty and hair care company with strong brands, excellent management and an organization with deep expertise in the beauty business,” said P&G chairman, president and ceo A G Lafley. “This acquisition is a great strategic fit given P&G’s leadership and proven strength in its core hair care business. The deal further expands P&G’s beauty businesses across Eastern and Western Europe, and in Latin America.”
Procter & Gamble, with its prestige perfumery brands such as Hugo Boss (the most important brand), Giorgio Beverly Hills, Jean Patou, Lacoste, Laura Biagiotti and Yamamoto is of about equal size and importance as Wella in global travel retail perfumery trade. Both have a market share of about 3%. Wella has a very rich portfolio of 22 travel retail perfumery brands with Gucci at the top in addition to old established brands such as 4711, Alfred Dunhill and Rochas as well as relative newcomers such as Cindy Crawford, Anna Sui and Montblanc.
The combined portfolio of Procter & Gamble and Wella Group reached global travel retail sales worth about US$ 250 million (at consumer prices) in 2002 equal to a market share of about 6%, according to Generation DataBank
