P&G to sell Camay and Zest soap brands to Unilever
23 December 2014
P&G did not reveal the financial terms of the transaction, but expects to complete the deal by the first half of next year subject to regulatory approvals.
The sale comes just a month after P&G sold its Duracell battery business to Warren Buffett's investment arm Berkshire Hathaway, (See: Warren Buffett to buy Duracell from P&G in a stock swap deal worth $3 bn) and most of its pet food business to Mars Inc for $2.9 billion in September.
The latest sale includes the transfer of a manufacturing facility in Mexico and 170 employees to Unilever.
The deal involves the global sale of the Camay and the Zest brand outside of North America and the Caribbean and the Talisman manufacturing facility in Mexico.
The Cincinnati-based company noted that the sale of both brands is consistent with its strategy to focus on its core brands that will create a faster growing, more profitable P&G that is far simpler to operate.
P&G, the world's largest consumer products company, had in August said that it would divest 80-100 slow-growing brands and focus on about 80 brands, which generate 95 per cent of the profits and 90 per cent of sales.
Last month Reuters reported that P&G is exploring the sale of its Wella hair care business that could be worth around $7 billion. (See: P&G explores sale of Wella hair care business worth around $7 bn)
Although both Zest and Camay are profitable brands, but the combined profit margins were lower than the company average.
Camay's annual revenue is estimated to be around $126 million with a compound annual growth rate of 8 per cent in the last five years, while Zest is a $170 million brand with 4 per cent growth according to a recent report compiled by Bernstein Research.