In a bid to continue the streamlining process which it had put into motion in August, 2014, Procter & Gamble Co (NYSE:PG) made an announcement recently pertaining to its intention of disposing Wella, its hair-care unit. To this effect, the company is acquiring guidance from Goldman Sachs as to how to go about the process and has pegged the price at $7 billion, although it is yet to be decided as to whether the business would be disposed in its entirety or sold in parts.
When CNBC projected this latest development on its ‘Breaking News’ show hosted by Dominic Chu, it also mentioned that this decision has come subsequent to the Ohio-based FMCG specialist having already sold its Duracell battery and pet-food unit to interested parties. According to statements form Procter & Gamble Co (NYSE:PG), there would more such announcements in future as its objective is to shave off as many as 100 of its product lines so as to be able to focus on the remaining 80. Considering that it is these 80 brands which generate a lion’s share of its profits and sales, it is only fair on the management’s part to focus only on these.
Wella, a Switzerland based hair-care specialist, had been acquired by Procter & Gamble Co (NYSE:PG) in 2003 as a part of its indiscriminate expansion drive. The 6.5 billion Euros that had been paid had been inclusive of the 1.1 million Euros that Wella had accumulated over its years of functioning. Having occurred in the wake of acquisition of another hair-care business name Clairol, this was hailed as the biggest ever acquisition made by the company during that time.
After this deal is through, company sources have revealed that it will probably be Braun’s turn to be put up for sale, thus proving that Procter & Gamble Co (NYSE:PG) is indeed serious about re-structuring which it had promised its shareholders.
This article has been written by Vinita Basu.