Procter & Gamble Co (PG) Starts Shedding Laggard Assets


Procter & Gamble Co (NYSE:PG) is offloading some of its laggard assets as the company seeks to become lean and effective in its operations. Sale documents for some of the laggard assets up for sale have already been dispatched to potential bidders as the company moves to offload the assets as soon as possible.

Assets for Sale

Some of the assets up for sale include its hair care unit, as well as the fragrance business. The two units could be sold individually or as a combined entity, according to people familiar with the matter. Procter & Gamble Co (NYSE:PG) hopes to fetch as much as $19 billion from the two unit’s altogether. Some of the potential buyers include Henkel AG, Revlon Inc, and Kao Corp.

The latest round of asset sales is part of Procter & Gamble’s strategy to reinvigorate growth through the divestiture of more than 100 slower selling brands, which account for 10% of the company’s total revenue, according to CEO, A.G Lafley. Exane BNP Paribas estimates that the units up for sale could generate as much as $8 billion in annual sales, accounting for $1.5 billion in profits.

IPO for Some Units

Jeff Stent, an analyst at Exane, expects Procter & Gamble to announce the disposal of the beauty business in the coming months, with European listed homes and personal care companies expected to be the acquirers. There has also been talk that Procter & Gamble Co (NYSE:PG) could explore the possibility of an initial public offering for some of the beauty brands, according to people with knowledge of the matter.

The company has been in talks with Goldman Sachs Group Inc (NYSE:GS) for quite some time on the possible sale of Wella. More than half of the units $2.8 billion in revenue is generated from hair salons as one of the sales channels that has no connection to Procter & Gamble Co (NYSE:PG)’s other businesses. The fragrance business has also not been doing well, seen by it losing market share. Some of the other divisions that could be up for sale include maker of electric shavers and toothbrushes, Braun.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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