Colgate Wraps Up Sanex Buy - Analyst Blog
June 21 2011 - 10:45AM
Zacks
U.S. consumer goods conglomerate Colgate-Palmolive
Co. (CL) announced the completion of the acquisition of
the Sanex personal care brand from Unilever
NV (UN). The deal had cost the company $952
million.
The acquisition supports Colgate’s objective of expanding in the
high-margined oral care and personal care businesses. Sanex is
particularly a good opportunity for Colgate to grow its deodorant
and body wash business overseas. The brand has a distinct
positioning around healthy skin with a strong market share in
Europe. Sanex generated 2010 net sales of €187 million
(approximately US$260 million), primarily in Western Europe.
Unilever, which purchased Sanex as part of its $1.7 billion
acquisition of Sara Lee Corp.’s (SLE)
international toiletries unit, was forced to sell the brand due to
pressure form the European Union. The European economic and
political union raised concerns about competition issues in Europe
compelling Unilever to shed Sanex.
Colgate, which earns more than 80% of its revenue from outside
North America, will be able to build a strong platform of growth in
key parts of the personal care market in Western Europe as a result
of the transaction.
Colgate estimates to add approximately 4% to its fiscal 2011
earnings attributable to a one-time gain from the sale of the
detergent business. The company forecasts that the addition of the
Sanex brand will contribute 1% earnings growth in fiscal 2012.
Colgate-Palmolive is a leading global consumer products company,
tightly focused on Oral Care, Personal Care, Home Care and Pet
Nutrition. We maintain our long-term “Neutral” recommendation on
Colgate. The quantitative Zacks #3 Rank (short-term Hold rating)
for the company indicates no clear directional pressure on the
stock over the near term.
COLGATE PALMOLI (CL): Free Stock Analysis Report
SARA LEE (SLE): Free Stock Analysis Report
UNILEVER N V (UN): Free Stock Analysis Report
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