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PREVIEW / WEEK OF SEPT. 30-OCT. 6

P&G May Bid for Owner of Nivea Brand

September 30, 2002|Bloomberg News

Procter & Gamble Co. Chief Executive A.G. Lafley would accelerate growth at his company, the largest U.S. consumer-products maker, by acquiring German firm Beiersdorf, whose sales are rising three times as fast because of demand for its Nivea skin-care products, investors and analysts said.

Procter & Gamble might bid as much as $11 billion for Beiersdorf, mainly to get Nivea, the world's biggest skin-cream brand, analysts said.

The Financial Times Deutschland reported last week that Procter & Gamble plans to bid for German insurer Allianz's 43.6% stake in Beiersdorf, citing unidentified people.

Lafley, who formerly headed the beauty business, has said he wants to expand more profitable cosmetics and health-care lines, whose sales are rising more rapidly than staples such as Pampers diapers and Charmin tissue. In two years as chief executive, he has winnowed Procter & Gamble's more than 250 brands by selling declining businesses such as Comet cleaner and Crisco shortening.

Linda Ulrey, a spokeswoman for Cincinnati-based Procter & Gamble, declined to comment on the takeover speculation. Allianz spokesman Stefan Denig declined to comment on potential bids.

Procter & Gamble's sales have risen 2.4% a year the last five years, compared with 9% annual gains for Hamburg-based Beiersdorf.

The acquisition would boost Procter & Gamble's beauty business to about 23% of its sales from 20%, estimated Carol Wilke, an analyst at Merrill Lynch & Co., who doesn't own the stock.

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