P&G Stalks German Rival Beiersdorf

13 December 2002

German consumer products giant Beiersdorf, whose brand portfolio includes bestselling global skincare range Nivea, could find arch-competitor Procter & Gamble in possession of a significant 43.6% tranche of its stock – an outcome it is unlikely to view with enthusiasm.

The key Beiersdorf stake is owned by German insurance group Allianz, with which P&G is currently in negotiation. An offer of €5.5 billion ($5.58bn; £3.53bn), or €150 per share, is reportedly on the table. But the Federal Financial Supervisory Agency, which must be informed of official bids exceeding 30% of a company’s stock, has not received notice of any offer.

Informed observers believe there is a deal of frantic underwater paddling going on and opine it unlikely that P&G’s objective is simply to acquire a large a minority holding in its rival.

They suggest the Cincinnati colossus is biding its time while it trawls for another substantial slice of Beiersdorf – sufficient to lift its holding above 75%, under German law the minimum level at which it could restructure the company.

A prime target could be the 31% stake controlled by Germany’s Harz dynasty (owners of coffee manufacturer Tchibo Holdings, through which the Beiersdorf shares are held). Word from those close to the situation is that the Harz clan is willing to sell but is asking too stiff a price.

The talks have been in train for some months [WAMN: 24-Sep-02]. Gaining control of Nivea would be a strategic triumph for P&G in its battle with L’Oréal of France (which has itself bid unsuccessfully for the Beiersdorf stake) to become top gun in the global skincare sector. Currently P&G trails L’Oréal in Europe.

Hamburg-based Beiersdorf is ranked 40 in AdAge’s global marketing league.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff