Henkel Scoops Up U.S. Maker of Wisk -- WSJ
June 25 2016 - 3:03AM
Dow Jones News
By Monica Houston-Waesch and Ellen Emmerentze Jervell
Germany's Henkel AG agreed to buy the maker of All and Wisk
laundry detergents for about $3.6 billion, as the consumer-products
company presses its competition with Procter & Gamble Co. in
the U.S.
The EUR3.2 billion transaction combines Henkel, whose major
brands include Persil laundry detergent and Dial soap, with Sun
Products Corp., which in addition to detergents sells Snuggle
fabric softener and Sunlight household soaps. The deal gives the
European company a bigger presence at U.S. retail chains. Last
year, Sun Products generated sales of about $1.6 billion in the
U.S. and Canada.
"North America is one of the most important regions for us
world-wide," said Henkel Chief Executive Hans Van Bylen. The
company is pushing hard to take on P&G in its home market. The
U.S. is currently Henkel's largest region in terms of revenue, it
said. The Düsseldorf, Germany-based company reported North American
regional sales of EUR3.6 billion in 2015 out of total revenue of
about EUR18 billion.
Deutsche Bank estimates that Henkel together with Sun will have
21.3% of the U.S. liquid laundry market, leapfrogging Church &
Dwight, with 17.1%, and trailing PG's dominant 55% share.
Sun Products, which is based in Wilton, Conn., was created in
2008 after another European consumer-products giant, Unilever NV,
decided to exit the North American laundry detergent business.
That is when Unilever sold All, Snuggle and other brands to New
York-based private-equity firm Vestar Capital Partners Inc. for
about $1.45 billion.
Sun's midprice laundry detergents have been struggling in the
U.S., squeezed between P&G's Tide at the premium-priced end of
the market and Church & Dwight Co.'s Arm & Hammer discount
offering, according to analysts. The company employs around 2,000
people and has two production sites as well as one research and
development center in the U.S.
Henkel's former chief executive, Kasper Rorsted, said late last
year, before stepping down, that he wanted the company's U.S.
business to become between 25% and 27% of its total business, up
from 20% then.
In 2015, Henkel struck a deal with Wal-Mart Stores Inc. in which
the retailer agreed to be the exclusive carrier of Henkel's
premium-priced Persil, challenging Tide. It also recently acquired
other U.S. companies, including several professional hair-care
brands and Bergquist Co., a maker of insulation and other
thermal-management products.
Write to Monica Houston-Waesch at nikki.houston@wsj.com and
Ellen Emmerentze Jervell at ellen.jervell@wsj.com
(END) Dow Jones Newswires
June 25, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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