Unilever ready to pounce on Wella

Food and household products group Unilever is expected to spark a three-way bidding war for Wella, the €4.4bn German cosmetics and hair care company.

Food and household products group Unilever is expected to spark a three-way bidding war for Wella, the €4.4bn German cosmetics and hair care company.

The UK group is ready to pounce on Wella in an effort to beat United States cosmetics giant Procter and Gamble, which is close to making a bid, and Henkel, the German rival which revealed a stake last week.

According to the Sunday Express newspaper, chief executive Niall Fitzgerald is believed to be looking ahead to the next phase of development.

If Unilever, which last week delivered a 16% rise in pre-tax profit to £2.6bn (€3.8bn), is successful in the bid it will improve its chances of lifting its operating profit margin by 16% by 2004. This was the target set under the terms of its “Path To Growth” business improvement campaign.

Wella is second in the global professional hair care market after French group L’Oreal and number four in the consumer hair care business. Acquisition of the company would improve Unilever’s chances of hitting its targets.

But any bid from Unilever is likely to intensify a contest which is already brewing between Procter and Gamble, the world’s largest cosmetics group, and Henkel, well known for its Persil washing powder brand.

Although the biggest stumbling block for any Unilever bid is likely to be family shareholders who own a combined 78% of Wella, recent press reports in Germany have suggested the family may be ready to sell its stake.

Wella’s portfolio of hair care brands, such as Vitality and Vosene, would fit well within Unilever’s range – which is worth more than £700 million a year in sales and includes Organics, Salon Selectives and Timotei.

A spokesman for Unilever declined to comment today.

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