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Hair Care’s New No. 1: P&G Leaps to Top Rank With Plan to Buy Wella

Procter & Gamble’s $6 billion acquisition of Wella brought P&G bragging rights as the world’s largest hair care company, finally passing rival...

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Clayton Daley, chief financial officer for P&G, said during the company presentation regarding shareholder tender of outstanding shares: "We have not spoken to Henkel….We’re just cautiously optimistic [that] the folks at Henkel, having made a pretty nice little profit on their investment, [are] just happy to take the profit, but that is out of our hands."

Henkel reportedly has said that it will not make a counterbid.

While no one expects L’Oréal to sit on its laurels and allow P&G to gain on its overall beauty market share lead, most of industry focus is now centered on what will happen to Beiersdorf.

Beiersdorf, which owns Nivea, Juvena and La Prairie, among other brands, has been keeping the rumor mill going double time. That’s because its majority shareholder Allianz has been shopping around its 43.6 percent stake, while German coffee company Tchibo’s 30 percent "blocking minority" remains an obstacle.

As reported, P&G has been eyeing Beiersdorf, looking to add its Nivea skin care line to P&G’s corporate umbrella. Others, such as Unilever, reportedly have been giving Nivea further consideration as well. The timing of a deal for Beiersdorf, if any were to take place, could be the determining factor regarding which firm takes control of the skin care line.

One Wall Street analyst didn’t expect P&G to make a move anytime soon.

"Another large acquisition would have additional integration risk. Trying to assimilate two at the same time would be a lot for a company, even P&G," she said.

Another analyst agreed, saying that Beiersdorf may be breathing easier in the wake of the P&G-Wella deal. "The pressure [on Beiersdorf] is off in the short term, as one of the major players is out, " the analyst said, suggesting that P&G would be out of the running for an acquisition the size of Nivea for at least two years.

As for L’Oréal’s interest in Beiersdorf, the analyst said that the company "is not in acquisition mode right now. They’d love Nivea but they’re not interested in the rest [of Beiersdorf’s portfolio.]" Unilever, the analyst added, "is focusing on spreading out the Dove brand which would be cannibilized by an acquisition of Nivea."
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