LONDON: Unilever, the consumer goods giant, has agreed to buy the personal care arm of Sara Lee, its US counterpart, as it seeks to strengthen its position in Europe and Asia, and further develop its product portfolio in this sector.
The acquisition, which includes brands like Sanex, Radox and Duschdas, will cost the Anglo-Dutch firm €1.28 billion ($1.88bn; £1.18), and constitutes its largest purchase since the takeover of SlimFast and Ben & Jerry's for a combined $2.6bn in 2000.
Paul Polman, the FMCG titan's chief executive, said that "personal care is a strategic category and a key growth driver for Unilever."
"This transaction builds on our portfolio in Western Europe and also in Asia. The Sara Lee brands enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever's existing business," he added.
Polman has previously stated his intention to increase advertising spending, focus on "consumer thinking" and expand the CPG manufacturer's operations in emerging markets as ways of driving revenue growth during the downturn.
Earlier this year, he also said that Unilever will take "quicker actions where we're feeling that our brands are out-positioned or at a disadvantage, where we're losing share," in an effort to reverse an "inherited assumption that the company will not grow."
This approach appears to have proved successful thus far, as the owner of Knorr and Axe has out-performed some of its major rivals, including Procter & Gamble and Nestlé, in the recent past.
The products included in the deal with Sara Lee generated annual sales of €750 million for the year ending in June, and derived 15% of this revenue from emerging markets.
Vindi Banga, president of Unilever's foods, home and personal care arm, said that this "strong stable of brands … will help build on our global leadership positions in skin cleansing and deodorants."
However, Credit Suisse argued that "we're not convinced that this is the greatest collection of assets, but another acquisition shows Unilever is still moving from the back foot – cost cutting, disposals – to the front foot – volume growth, acquisitions."
Speaking to the Wall Street Journal, a Unilever spokesman said 85% of these products were a "perfect fit" for the company, but it "may in the future sell some of the smaller acquired brands."
Sara Lee has sold off a variety of its assets in the recent past, including its clothing lines in the US and Europe, as it seeks to focus on a smaller number of product categories, particularly food and coffee.
Data sourced from Unilever/Wall Street Journal/Reuters; additional content by WARC staff