P&G and Beiersdorf – A potential match made in heaven?
Neither company was available for comment, saying it was not policy to talk about rumour or speculation, and a Reuter’s source has also dismissed the talks; despite a Beiersdorf share increase prompting market speculation that one of the shareholders, Maxingvest, was willing to sell to the US rival.
"We are not talking with anyone, we last spoke with P&G in 2003 and there's nothing in the rumour," the Reuter’s source said.
Potentially a good move…
However, despite the denial, one cannot help but feel it could make good sense if a deal was to be made, given P&G’s recent performance in Beauty & Grooming, contrasted with the successes that the Nivea skin care maker has experienced.
Earlier this year, even though the group posted positive results, P&G’s Beauty & Grooming category dropped behind its competitors leading to many analysts suggesting the Ohio-based firm should consider divesting the beauty business and focus on its other areas.
On the other hand, Beiersdorf saw its profits rise once again, helped by the continued success of its Nivea brand; one which P&G has singled out as ‘impressive’ in the past.
Beiersdorf would certainly complement P&G in the skin care category too, as it has a strong focus on developing on key markets such as Brazil and China, and according to Euromonitor, market share in Eastern Europe skin care would increase almost ten-fold if a deal was to be struck.
The speculation has aided the Germany-based manufacturer too, as Beiersdorf share price remains high as the rumours circulate.
It is not the first time a deal like this has been spoken of, and P&G has never hidden the fact that it finds Beiersdorf an ‘interesting’ company.
Back in 2010, a similar thing happened as Beiersdorf share prices roseafter P&G CEO (at the time) Robert McDonald was quoted in a press report saying that Beiersdorf’s Nivea is a “terrific global brand… [Speaking of a possible acquisition] the price and contract would have to be right.”
Again, analysts at the time spoke positively of a deal, with Deutsche Bank AG's William Schmitz saying that P&G should pursue Beiersdorf as it will add a good international brand to its portfolio.
"If he could do one deal, I think Beiersdorf would be No. 1 on his list," he commented.
The story goes back further though, as P&G made an attempt to acquire the Hamburg-based cosmetics firm back in 2002; but lost out to family holding company Tchibo.
P&G was in talks with insurance group Allianz over its 43.6 per cent holding, which would have meant P&G would then have to make an offer for the entire stock under German law, but an agreement could not be reached.