NEW YORK (
) -- Shares of
rose Tuesday after an analyst reportedly suggested the New York-based consumer products giant could be a takeover target for
Nicholas Sochovsky, an analyst at UniCredit SpA, says London-based Unilever should look to acquire Colgate-Palmolive to help its expand its revenue in emerging markets, and gain market share in the personal-care business, according to the
Sochovsky estimates Unilever would likely have to pay around $55 billion for Colgate-Palmolive, the maker of Ajax cleaners, Irish Spring soaps and Speed Stick deodorants,
said, a consideration that would represent a healthy premium to the target's market cap of $36.8 billion as of Monday's close.
Colgate-Palmolive's shares jumped nearly 3% to $78.44 in recent trades. Volume of 4.1 million was well above the issue's trailing three-month daily average churn of 2.8 million. Unilever shares ticked 10 cents lower to $29.58 with volume running slightly higher than normal.
Colgate's stock is cheaper than it's been in 10 years, trading at less than 9 times EBITDA
earnings before interest, tax, depreciation and amortization, Sochovsky writes, according to the article.
Acquiring Colgate "would accelerate
Unilever's portfolio shift to personal care, consolidate Unilever's emerging market strength, provide scale in the U.S." and help to improve margins, Sochovsky says in the note cited by
The global household and personal care industry is expected to grow at over 3% year over year. Much of this growth is expected to come from emerging markets in Asia and Latin America on account of rising disposable income levels and high population growth rate.
Even so, Europe accounts for over 40% of global revenue in the household and personal care products market, according to independent research firm Trefis.
Trefis estimates that food and consumer products contribute roughly half of Unilever's value while home and personal care products account for the remainder of items sold.
Uniliver's portfolio of brands includes Knorr, Lipton, Hellmann's, Magnum, Omo, Dove, Lux and Axe/Lynx.
Recent Unilever acquisitions include
, which manufactures haircare products under the TRESemme and Nexxus brands, as well as
( SLE) European shower-gel and detergents businesses.
On Nov. 17
Unilever received regulatory approval from the European Union to acquire Sara Lee's personal care and European laundry business for $1.87 billion .
The EU will require Sara Lee to sell its Sanex deodorant brand to address antitrust concerns gives its strong portfolio of Axe and Rexona deodorant brands. The deal also brings with it regional product category leaders such as Biotex in Laundry, Zwitsal and Fissan in Baby Care, and Prodent and Zendium and Oral Care.
Prior to the Sara Lee deal, it had been almost a decade since Unilever acquired any major businesses, and its purchase of the Sara Lee portfolio of more than 90 brands in 19 European countries will certainly assist with its international expansion plans and in facilitating the seller's goal of focusing on its core food and beverages businesses.
On Dec. 17
Unilever confirmed that Alberto Culver shareholders voted to approve its $3.7 billion takeover .
Written by Miriam Marcus Reimer in New York
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