Battle for professional hair-care market

Related tags Procter & gamble Us

L'Oréal may be seeking to acquire Alberto-Culver to ward off
competition in the US hair-care market. With the acquisitions of
Clairol in 2001 and Wella last year, Procter & Gamble has made
it clear that it is trying to usurp L'Oreal as the global leader in
hair-care products.

Alberto-Culver - in addition to making its own hair-care products - operates America's biggest distribution business to hair salons. Owning that business would give L'Oreal a greater grip on the $2.9 billion US professional market.

The acquisition would further boost L'Oreal's lead over P&G in the US. The french beauty giant already has more than double P&G's hair-care business, with 2003 sales of $663 million.

Despite Alberto-Culver posting faster earnings growth than the US personal-care industry overall, the prospects for its hair-care products - led by its Alberto V05 brand - are under increasing pressure from much larger rivals.

Culver's professional-distribution is by far its most profitable business accounting for two-thirds of its sales. The business consists of 2,000 Sally Beauty Supply stores, which sell to both professionals and the public. Culver also owns Beauty Systems Group, which distributes higher-end products from manufacturers directly to salons.

Sally and Beauty Systems not only accounts for the majority of L'Oréals US sales already, but also Procter & Gambles. If the L'Oréal acquisition was to go ahead P&G may be left with no choice but to stay with Sally because no chain could match its size.

With so much at stake, analysts believe that P&G would also be likely to make an offer for Culver. Both L'Oréal and P&G could support offers expected to be between $4.2 billion and $4.8 billion, including Culver's debt.

Alberto-Culver, L'Oréal and P&G have all declined from comment.

Related topics Market Trends Hair Care

Related news

Show more

Related products

How Nutricosmetics Can Enhance Skin Beauty

How Nutricosmetics Can Enhance Skin Beauty

Content provided by Activ'Inside | 11-Dec-2023 | White Paper

In the ever-evolving realm of nutricosmetics, where inner wellness meets outer beauty, few natural ingredients have captured the spotlight quite like grapes.

Ultimate Antimicrobial Solution for BPC

Ultimate Antimicrobial Solution for BPC

Content provided by Acme-Hardesty Company | 11-Oct-2023 | White Paper

Sharomix™ EG10, a versatile broad-spectrum antimicrobial liquid blend for preserving personal care products, ensures safety at usage levels ranging from...

Acme-Hardesty Expands Product Line into Canada

Acme-Hardesty Expands Product Line into Canada

Content provided by Acme-Hardesty Company | 07-Jul-2023 | Product Brochure

Acme-Hardesty’s latest expansion into Canada includes Resplanta®, Botaneco®, and BYK from our partners Sharon Personal Care and Eckart Effect Pigments...

Related suppliers