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P&G Beauty Assets Action Reaches Final Stages

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Published on : Jun 10, 2015

The Procter and Gamble Company, having auction of its beauty assets is reaching the final stage, with as much as five companies bidding for different areas  of its business pertaining to hair, fragrance, and cosmetics.

Henkel, the consumer goods group from Germany, and KKR, are competing for the hair care business of P&G that includes Clairol and Wella cosmetic brands.

The unit could have valuation up to US$7 billion, as commented by people involved in the negotiations.

Coty, which includes brands such as Rimmel, Davidoff, and Calvin Klein have proposed for P&G’s fragrance and cosmetic units, which has brands Christina Aguilera Perfumes and Olay respectively.

Clayton Dubilier & Rice, which is the holding company for numerous consumer product companies will undergo competition with Coty for the cosmetic business that could have valuation up to US$3 billion.

Warburg Pincus, an American buyout group that boasts of a large consumer goods and healthcare portfolio, will compete with Coty for the fragrance business that may have valuation up to US$2 billion.

Revlon was in the race for the cosmetic assets but later dropped out. 

The staging of the auction is part of a larger push by the largest consumer goods company in the world, in pursuit to sharpen focus on small number of brands. This is to improve its brand image which became unwieldy, dropping down total revenue when US consumers became more cautious after the financial crisis. 

Beauty is one business areas where the company has been struggling. In the last quarter, in the beauty line of the company net sales dropped by 11%, which was ninth quarterly fall in consecution.