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Interest in Kanebo Acquisition Intensifies
TOKYO — What company might take over Kanebo's $2 billion beauty business?
Included on the list of firms reported to have shown an interest are Japanese companies such as Kao Corp., Shiseido and Kose, plus non-Japanese beauty giants such as L'Oréal and Procter & Gamble.
Kanebo's cosmetics operation, which generated 204 billion yen, or $1.84 billion dollars at average exchange rates, for the fiscal year ended March 31, 2004, was spun off of the heavily indebted firm last year under a restructuring plan backed by the state corporation bailout agency Industrial Revitalization Corp. of Japan.
Industry specialists have varying views on which company in Japan might be the front-runner in a possible bid for an acquisition of Kanebo and Kanebo Cosmetics.
Kao has popped up on the short list.
"Kao shows strong interest in taking over Kanebo's cosmetics businesses," said Hideo Sato, a beauty business consultant.
And this wouldn't be the first time. As reported two years ago, Kao, Japan's largest household products manufacturer, was in talks with Kanebo Ltd. to buy Kanebo Cosmetics. But talks unraveled in the final hour after union opposition.
Shiseido has also announced that it is keen to bid on Kanebo, but some analysts aren't bullish on the marriage.
One analyst, who requested anonymity, said there might be too much crossover in terms of product type to make a Kanebo deal of real interest to Shiseido.
Kose, possibly in alliance with other firms, is reportedly only interested in buying Kanebo's cosmetics division, despite IRCJ's expectation to sell Kanebo and Kanebo Cosmetics together.
According to an IRCJ statement issued in April, Kanebo is on the road to recovery. IRCJ said: "Kanebo today is operating under an appropriate management structure" and "currently making steady efforts toward the realization of its business revitalization plan."
As reported, Kanebo's restructuring plan was made public after the firm's announced insolvency of 357.7 billion yen, or $3.19 billion, for the fiscal year ended March 31, 2004.
— Koji Hirano
Nu Skin Earnings Gain 12.3%
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