Unilever yesterday announced it will buy US hair and skin care specialist Alberto Culver in a deal worth $3.7bn (£2.34bn).
The acquisition of the firm behind household names such as V05 and TRESemme marks the single biggest Unilever acquisition in almost a decade.
The new brands will complement Unilever’s existing portfolio, which includes Dove, Clear and Sunsilk in hair care, and Vaseline in skincare. It will also enhance Unilever’s presence in key emerging markets such as Mexico.
Moreover, the deal will bolster Unilever’s flagging hair care sales in its core US market. In the last year Alberto Culver generated sales of $1.6bn and earnings of $250m.
It is also likely to herald as-yet unspecified cost savings.
Execution Noble called the deal “more evidence of a strategically and financially sound re-investment philosophy at Unilever” and Charles Stanley reiterated its “accumulate” recommendation in the wake of the news.
The acquisition follows a yet-to-be completed deal to buy Sara Lee’s body care division for $1.3bn. The firm’s largest value acquisition was the massive $20.3bn acquisition of Bestfoods in 2000.
Chief executive Paul Polman said: “Personal care is a strategic category for Unilever and growing rapidly.
“Ten years ago it represented 20 per cent of our turnover; strong organic growth has driven it to now reach over 30 per cent, with strong positions in many of the emerging markets.”
Unilever shares closed up 1.28 per cent on the back of the news yesterday.