Unilever/Alberto Culver Must Shed VO5, Rave to Merge
Unilever reached an agreement with the US Department of Justice (DOJ) that will complete its proposed acquisition of the Alberto Culver Company with one stipulation: Unilever must first divest the Alberto VO5 brand in the United States from the Alberto Culver portfolio and the Rave brand from the Unilever portfolio to ease antitrust concerns.
The US DOJ said the deal as proposed would "substantially lessen competition in three product markets—value shampoo, value conditioner and hairspray sold in retail stores." Value shampoos and conditioners are those typically sold for less than $2 a bottle.
The US DOJ said the deal as proposed would "substantially lessen competition in three product markets—value shampoo, value conditioner and hairspray sold in retail stores." Value shampoos and conditioners are those typically sold for less than $2 a bottle.
“Without the divestitures required by the department, consumers would have paid higher prices for value shampoo and conditioner and for hairspray sold in retail stores,” says Christine Varney, assistant attorney general in charge of the Department of Justice’s Antitrust Division.
Upon completing the transaction, Unilever will continue to advance the growth potential of the Alberto VO5 brand in markets outside the United States, such as the UK, South Africa and Australasia, where the brand has a strong consumer base.
Paul Polman, Unilever CEO says, "We are very pleased to have received the regulatory clearances necessary for us to complete the acquisition. This acquisition is a further step in Unilever’s transformation. The deal enhances Unilever’s presence in attractive, high-growth categories and brings a portfolio of desirable brands that are gaining share. It also gives Unilever the opportunity to use its scale, reach and technology to take Alberto Culver’s brands to a new level in existing markets, and enables us to use our unparalleled presence in emerging markets to extend them further."
The Alberto Culver deal is the latest in a series of acquisitions that includes the home and personal care products of Sara Lee in 2010, the premium hair-care company TIGI in 2009 and ice cream businesses in Russia, Greece and Denmark. These acquisitions are improving the mix of the company’s portfolio towards higher growth areas in developed markets and filling in category gaps in fast-growing developing and emerging markets.
With the acquisition Unilever becomes the world’s leading company in hair conditioning, the second largest in shampoo and the third largest in styling.
The Alberto Culver transaction remains subject to regulatory approval in the United Kingdom, Argentina, Honduras, El Salvador and the Isle of Jersey. As such, the relevant businesses will remain competitors in these jurisdictions until the respective local authorities, which are expected in due course, have approved the acquisition. Where relevant, appropriate arrangements have been put in place in these jurisdictions to allow completion of the global acquisition of Alberto Culver.