Procter & Gamble Co (P&G) yesterday said that it would exit its 50-year-old battery brand, Duracell, and create a stand-alone company for it.
The Ohio-based company said that it has made no decision on the form of the exit, but its current preference is a split-off of the Duracell business into a stand-alone company.
In a split-off, P&G shareholders would be given the option of exchanging some, none, or all of their P&G shares for shares in the newly formed Duracell company, and shareholders would be notified when a final decision regarding the form of the business separation.
It also said that any alternative exit scenario – including a spin-off, divestiture or other offer – that generates equal or better value would be considered.
P&G, the world's largest consumer products maker, has owned Duracell since it acquired Gillette in 2005. Duracell generates sales of $2 billion a year, according to Jon Moeller, the company's chief financial officer.
Duracell was made by scientist Samuel Ruben who teamed up with businessman Philip Rogers Mallory and formed the The P.R. Mallory Company to produce mercury batteries for military equipment.
P R Mallory was acquired by Dart Industries in 1978, which in turn merged with Kraft in 1980. Private equity firm Kohlberg Kravis Roberts bought Duracell in 1988 and took the company public in 1989. It was acquired by Gillette in 1996 for $7 billion and P&G acquired Gillette in 2005 for $57 billion.
After years of expansion into lines like pet food and beauty products, P&G, which also makes Gillette razors, had in August said that it would cut as many as 100 brands from its portfolio to focus on others, like Tide detergent, that has made the company a powerhouse over the decades.
The move is part of a strategy to improve the company's financial performance focussing on about 80 brands that generate 95 per cent of the profits and 90 per cent of sales.