Procter & Gamble goes for Wella
19 Mar 2003
Procter & Gamble (P&G) has signed an agreement to purchase a controlling interest in Wella from its majority shareholders. The cash purchase of 3.2 billion Euros gives the company 77.6% of Wella's voting shares.
P&G also intends to make a tender offer for the remaining voting and preference shares of Wella. P&G will offer a cash price of 92.25 Euros per share for the voting shares, and 61.50 Euros per share for the preference shares, valuing the total shares at 5.4 billion Euros.
P&G may, however, offer Wella's preference shareholders the option of accepting P&G shares as an alternative to the cash offer.
This acquisition is expected to contribute about 3.4 billion Euros in sales to P&G's overall beauty business - approximately 1.6 billion Euros in the professional hair care segment, 1.0 billion Euros in the retail hair care segment and 800 million Euros in fragrances.
The purchase is expected to have a neutral earnings effect in year one. Going forward, P&G expects the purchase to be slightly accretive to earnings per share in year two, and solidly accretive in year three.
Synergies to be gained from the combination of P&G and Wella are projected to be at least 300 million Euros by the third year.
This deal is subject to normal regulatory review and government approvals in various markets including the European Union and the US.
