The Dial Corp. has agreed to buy Right Guard and other deodorant brands from Procter & Gamble Co. for about $420 million.
Dial will acquire the No. 2 brand, along with Soft & Dri and Dry Idea, from P&G; subsidiary Gillette Co. under the deal signed Monday. P&G; was required to divest to win approval for its acquisition last year of Gillette.
P&G; spokesman Terry Loftus said the Cincinnati company is keeping its Old Spice, Gillette series, Tag, Sure and Secret deodorant brands.
P&G; is the leader in the U.S. market, followed by Netherlands-based Unilever NV, maker of Axe deodorants, Loftus said. Old Spice is the top men's deodorant in the U.S., followed by Right Guard
Dial, based in Scottsdale, Ariz., is the U.S. subsidiary of Duesseldorf-based Henkel KGaA. Dial's consumer brands include Purex, Tone, Renuzit and Soft Scrub.
"These leading brands are a perfect fit to our core business, body care, and will further increase growth and profitability of this business," Hans Van Bylen, the executive vice president of Henkel Cosmetics/Toiletries, said in a statement.
The deal still requires approval by antitrust authorities. Henkel said it expects the transaction to close before the end of this year's first quarter.
Sales of the brands last year amounted to about 230 million euros ($275 million.) Henkel said that about 80 percent of sales were in North America, with most of the rest in Britain.
Separately, Henkel said Tuesday that its sales rose by 13 percent last year to 11.97 billion euros ($14.3 billion). Operating profit was up 16.7 percent to 1.16 billion euros ($1.39 billion).
Henkel said the consolidation of Dial helped its performance, with sales in North America surging by 36.6 percent to 2.7 billion euros ($3.2 billion).
A Henkel statement did not give net or fourth-quarter earnings.
Henkel shares were down 1.2 percent to close at 90.78 euros ($108.47) on the Frankfurt exchange. P&G; shares fell 12 cents, to close at $60.88 on the New York Stock Exchange.
Posted by Constance Wherrity on February 21, 2006 12:29 PM
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