Unilever to buy 82% of Russian skin care maker as it continues its personal care push

The transaction is still awaiting regulatory approval and saw shares of Kalina jump 40 per cent when the market opened this morning.

The Russian brands in skin, hair and oral care, will complement Unilever's own brands such as Dove, Sunsilk, Timotei and Clear.

"We are delighted to be acquiring Concern Kalina. This will transform Unilever's personal care business in Russia, giving us leading positions in skin care and hair care, as well as establishing a presence in oral care,”​ said Unilever CEO Paul Polman.

Russia: an emerging market with big potential​

“It will also strengthen and re-balance Unilever's portfolio and competitive position in Russia, an emerging market with considerable potential and one of our priority countries."​

Polman explained that personal care is a strategic category for Unilever which is showing rapid growth. Ten years ago the segment represented 20 per cent of its Group turnover; however it now accounts for over 30 per cent and occupies a strong position in many of the emerging markets.

"Organic growth remains the cornerstone of our ambition to double the size of Unilever whilst reducing our overall environmental impact. Acquisitions such as Concern Kalina supplement organic growth and add powerful new brands to our portfolio,” ​he continued.

Concern Kalina is Russia's largest local personal care player in skin and hair care and has an expected 2011 turnover of around RUB 13 billion (€ 303 million).

Extensive distribution network​

Headquartered in Ekaterinburg, where its manufacturing facility is situated, Kalina has an extensive distribution network and sells its products primarily in Russia, Ukraine and Kazakhstan.

"The agreement reached with Unilever will enable the brands we have built into some of Russia's best loved and most recognised since we started in 1996 to be taken to new heights,"​ said Timur Goryaev, chairman of Concern Kalina.

"The coming together of our company with one of the most successful and best-known global companies represents a tremendous vote of confidence in the strength of our brands, the people who have built them and the potential of the Russian market,”​ added Kalina CEO Alexander Petrov.

Subject to obtaining the required regulatory approvals, the acquisition is expected to complete by the end of 2011, at which time Unilever intends to launch a Mandatory Tender Offer to acquire the remaining shares.