Euromonitor: P&G-Beiersdorf deal would complement both parties
There has been a host of speculation over a proposed agreement, although this was denied as both companies refuse to comment on speculation.
Complement both parties
Now, Euromonitor analyst Oru Mohiuddin has sifted through the data and suggested that a potential deal could see both manufacturers reap the rewards.
“P&G and Beiersdorf could benefit from a potential M&A activity. P&G would receive a boost in skin care, particularly in emerging countries, in line with its growth strategy and be able to diversify across skin care categories,” she comments.
“Even within facial care, P&G would be able to further diversify into department stores and pharmacies through La Prairie and Eucerin, respectively. On the other hand, with P&G’s backing, Beiersdorf could become more competitive. “
Skin care boost
According to Euromonitor data, if a potential deal is pulled off, Beiersdorf will provide such a skin care boost the Ohio-based consumer goods manufacturer, particularly in emerging markets, that it could knock cosmetics giant L’Oréal off the top and become the number one for skin care.
It would also see P&G’s skin care offering expand, with the German company’s body care offering boosting skin care sales, whilst also adding a hand care element to the portfolio.
With Asia-Pacific forecast to be where the big potential is in skin care in the next five years, it would ensure a strong foothold in the region, and give Beiersdorf the opportunity to really compete.
A full datagraphic on the figure by Euromonitor can be seen here.
The story so far…
The rumours unearthed themselves once more last month after a Beiersdorf share increase sparked speculation that one of the shareholders, Maxingvest, was willing to sell to the US rival.
These rumours were denied and the Nivea skin care maker said it had not spoken with P&G since 2003, when a potential deal was on the table.
The move also seemed to make sense given P&G’s Beauty & Grooming performance has dropped behind competitors whilst Beiersdorf profits rose helped by the continued success of its Nivea brand; one which P&G has singled out as ‘impressive’ in the past.
As P&G focuses on developing key markets such as Brazil and China, Euromonitor also suggests that market share in Eastern Europe skin care would increase almost ten-fold if a deal was to be struck.
Back in 2010, rumours also circulated as Beiersdorf share prices rose after P&G CEO (at the time) Robert McDonald was quoted in a press report saying that Beiersdorf’s Nivea is a “terrific global brand… [Speaking of a possible acquisition] the price and contract would have to be right.”