"We are excited to move forward on this strategically important acquisition that will strengthen Colgate's positions in the shower gel and deodorant categories in Europe and our overall personal care business in that region," Colgate CEO Ian Cook said.
According to TheStreet guest contributor Trefis, the deal, which was imminent given Colgate's health cash position, strengthens the company's personal care business in Europe with shower gels and deodorants marketed under the Sanex brand amounting to sales of more than $265 million in 2010. It also helps Colgate focus on the higher-margin personal care business amidst rising commodity costs affecting household care product segments. Colgate believes the transaction would increase earnings by 4% and improve margins by 1% by 2012.
The deal also included Colgate selling its laundry detergent business in Colombia to Unilever for $215 million. The selloff of Unilever's deodorants and bath-care business in Europe was required on antitrust grounds for European Union's clearance of the $1.82 billion purchase of Sara Lee's (SLE) personal care business in 2010.