Consumer goods giant Unilever today said it had agreed to buy US-based hair care group Alberto Culver for $3.7 billion in cash to boost its personal care business.
The Anglo Dutch group's acquisition will add brands such as V05, Tresemme and Nexxus, and make Unilever the world's leading company in hair conditioning, the second largest in shampoo, and the third largest in styling.
"Personal care is a strategic category for Unilever and growing rapidly. Ten years ago it represented 20 per cent of our turnover; strong organic growth has driven it to now reach over 30 per cent, with strong positions in many of the emerging markets," said Unilever chief executive Paul Polman in a statement.
The US company made annual sales of nearly $1.6 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of over $250 million in the 12-month period ending June 30th, 2010.
Its brands will complement Unilever's existing portfolio of products like Dove, Clear and Sunsilk in hair care, and Pond's and Vaseline in skincare, and will help build on Unilever's global positions in both the hair care and skin care categories.
The deal, if approved, will significantly enhance Unilever's hair care presence in the US, Canada, Britain, Mexico and Australasia, all of which are expected by Unilever to be significant hair care markets for years to come.
"Bolt-on acquisitions such as Alberto Culver supplement organic growth and add powerful new brands to our portfolio," Polman added.
Alberto Culver has operations in nine countries, including the US, Canada, Argentina, Mexico, Britain, South Africa and Australasia. It has six manufacturing plants and employs around 2,700 people.
The acquisition is subject to regulatory approval and also approval by Alberto Culver shareholders. The deal is expected to deliver significant synergies and, excluding restructuring costs, the acquisition will be accretive to earnings per share in the first full year.
Reuters