Analyst tips P&G for major acquisition

By Simon Pitman

- Last updated on GMT

Related tags Cosmetics giant shiseido Procter & gamble

A leading analyst has released a note to investors suggesting that Procter & Gamble may be scouting around for a major acquisition in an attempt to boost sales.

Ali Dibadj, a senior analyst with Sanford C. Bernstein & Co believes that the company may have its sights on the likes of Japanese cosmetics giant Shiseido, or possibly domestic player Estee Lauder.

In the note, Dibadj also stated that another major Japanese personal care player, Kao Corp, could be a target, while global hair and skin care specialist Alberto-Culver was another possibility.

Dibadj stated his belief that P&G would be most likely to target a major personal care or cosmetics company worth $10bn or less, an estimate that is likely to fit with all four companies he mentioned in his note.

P&G aims to reignite growth

P&G has enjoyed phenomenal growth over the past few years, boosted significantly by the acquisition of Gillette back in 2005 – a deal that made it the world’s largest consumer goods company.

The company has refused to comment on the suggestions from the note, underlining the fact that it does not acknowledge speculative information or rumors of any kind.

However, there is no disputing that the company has been hit by the worldwide economic recession, which has interrupted an unprecedented run of top-end sales growth.

Plenty to invest

Following on from the good times, the company still has plenty of money in store for further acquisitions, a strategy which many industry experts believe could help dig the company out of its present stagnation.

The company has already made two high-end male grooming acquisitions this year in an attempt to expand its presence in this fast growing segment.

In mid-June it bought the Zihr skin care and shaving brand and at the beginning of the same month it announced the acquisition of another US-based high-end male grooming brand, Art of Shaving.

P&G already dominates the male grooming segment with the Gillette brand, together with luxury brands Lacoste and Hugo Boss.

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