The Procter & Gamble Company (PG) hit a 52-week high of $90.56 on Nov 28 after Reuters reported that the company is exploring possible sale of Wella hair care unit that could be worth around $7 billion.
In this regard, the consumer giant is working with The Goldman Sachs Group, Inc. (GS) to carry out the plan, per Reuters.
The Wella rumors come two weeks after P&G announced its plans to divest the Duracell batteries business to Warren Buffet’s company Berkshire Hathaway, Inc. (BRK.B) in exchange for Berkshire’s equity stake in P&G. Berkshire currently owns approximately $4.7 billion stake in P&G. In a bid to fully exit the batteries business, P&G also sold its interest in a Chinese battery joint venture earlier this month.
The Zacks Rank #3 (Hold) company also divested its Asian and North American pet food business to Mars Inc., while agreeing to divest the European pet food business to Spectrum Brand Holdings Inc. (SPB) this year.
In August, P&G announced aggressive plans to streamline its business to focus more on 70 to 80 of its biggest brands including the Billion Dollar Brands like Tide, Pampers and Oral-B. Though P&G had not specified the brands it planned to keep or divest, it stated that these consumer and shopper preferred leading brands accounted for 90% of its sales and over 95% of profits.
In the next two years, P&G plans to harvest, partner, divest or discontinue 90 to 100 brands whose sales and profits have been declining over the past three years. The divesture of the underperforming businesses will help the company concentrate on its core businesses which have greater potential for growth and thereby improve the top line.
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