Consumer products maker Unilever NV said Monday it has agreed to buy Alberto Culver Co., the U.S. maker of beauty products such as TRESemme, VO5 and Simple, for US$3.7 billion in a management-backed deal.
Unilever, which makes Dove soaps, Axe deodorants and Suave shampoos, said it will offer $37.50 per share for Alberto Culver, a 19% premium to its closing price in New York on Friday. The deal must be approved by regulators and Alberto Culver shareholders.
Unilever Chief Executive Paul Polman said in a statement Alberto Culver will fit well with his company’s current beauty range.
“Personal Care is a strategic category for Unilever and growing rapidly,” Polman said in a statement.
Although Unilever intends to grow mostly via its existing brands “Bolt-on acquisitions such as Alberto Culver supplement organic growth and add powerful new brands to our portfolio,” he said.
He said the deal would add to Unilever’s per-share earnings in the first year.
Unilever, with dual headquarters in London and Rotterdam, Netherlands, is the world’s third-largest maker of consumer products behind Procter & Gamble and Nestlé. Some of its other well-known products include Ben & Jerry’s ice cream and Lipton tea.
Alberto Culver, based in Melrose Park, Illinois, has a market capitalization of about $3.1 billion based on Friday’s closing stock price of $31.48.
Graham Jones, analyst at Panmure Gordon & Co., said the price was “on the high side” but he saw it as positive for Unilever.
“It further skews Unilever to high growth, high margin personal care categories, gives a more rounded category presence in hair care and makes it global leader in hair conditioning, No. 2 in shampoo and No. 3 in styling.”
Unilever said the deal added styling and conditioning brands like TRESemme and Nexxus to its U.S. portfolio, complementing its own brands which include Suave, Dove, Sunsilk and Pond’s.
The Anglo-Dutch company said it would use its scale and distribution prowess to promote Alberto Culver’s brands more aggressively in their existing markets, and to introduce them to emerging markets.
