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Unilever to acquire Alberto Culver
September 27th, 2010
LONDON and MELROSE PARK, Ill. – United Kingdom-based consumer products giant Unilever plans to buy hair care and skin care manufacturer Alberto Culver Co. for $3.7 billion in cash.
Unilever and Melrose Park, Ill.-based Alberto Culver announced the deal early Monday. The companies didn't give a timeline for finalizing the agreement, which is subject to regulatory approval and must be approved by Alberto Culver shareholders.
According to Unilever, the acquisition will make the company the world's leading provider of hair conditioning, the second-largest in shampoo and the third-largest in hair styling. The deal also will boost Unilever's hair care presence in the United States, Canada, the United Kingdome, Mexico and Australasia, the company said.
Alberto Culver generated sales of about $1.6 billion for the 12-month period ended June 30, Unilever reported. With the acquisition, Unilever will pick up such beauty care and personal care brands as TRESemmé, Alberto VO5, Nexxus, St. Ives, Simple and Noxzema in the United States and internationally. Alberto Culver is also the second-largest U.S. producer ethnic hair care products, with brands including Motions and Soft & Beautiful.
"We are delighted to be acquiring Alberto Culver. Their people have done an excellent job of building an impressive range of brands such as TRESemmé, VO5, Nexxus, St. Ives and Simple," Unilever chief executive officer Paul Polman said in a statement. "These will complement Unilever's existing portfolio of iconic brands like Dove, Clear and Sunsilk in hair care and Pond’s and Vaseline in skin and will help build on our strong global positions in both the hair care and skin care categories."
Polman added that personal care is a strategic category for Unilever and that product segment is growing rapidly. "Ten years ago it represented 20% of our turnover. Strong organic growth has driven it to now reach over 30%, with strong positions in many of the emerging markets," he said. "Organic growth remains the cornerstone of our energizing ambition to double the size of Unilever whilst reducing our overall environmental impact. Bolt-on acquisitions such as Alberto Culver supplement organic growth and add powerful new brands to our portfolio."
Alberto Culver has operations in nine countries, including the United States, Canada, Argentina, Mexico, the United Kingdom, South Africa and Australasia. It has six manufacturing facilities and employs around 2,700 people. Besides beauty-related products, Alberto Culver's brand portfolio includes some household/grocery brands such as Mrs. Dash and Static Guard, which are niche category leaders in the United States.
The $37.50 per share price in the $3.7 billion deal represents a 33% premium to Alberto Culver's 12-month volume weighted average share price and an 18% premium to its all-time high closing share price achieved earlier this year, according to Alberto Culver.
"Viewing the global marketplace today, we believe that for these brands to achieve their full potential, they need to be able to compete in all major global markets," stated Carol Lavin Bernick, executive chairman of Alberto Culver. "Given the resources this would require, our brands' chances for success are better served by being merged into a larger organization with an even larger global footprint than Alberto Culver's. We believe Unilever is such a company, and we believe we are maximizing value for our shareholders through this agreement."
Commented V. James Marino, president and CEO of Alberto Culver, "Unilever has a long and distinguished history, and we look forward to our brands making an important contribution to the company's growth going forward. Both we and Unilever are committed to moving expeditiously to closing."
London-based Unilever, whose products reach more than 100 countries, has about 163,000 employees and generated annual sales of 40 billion euro in 2009. Its brands include Dove, TIGI, Lux, Axe/Lynx, Omo/Persil/Ala/Skip, Domestos/Glorix, Knorr, Hellmann's and Lipton.