The Procter & Gamble Company PG announced that it has completed the divesture of its Duracell batteries business — announced in Nov 20Array4 — to Warren Buffet’s company, Berkshire Hathaway, Inc. BRK.B, in exchange for Berkshire’s equity stake in P&G.
P&G capitalized Duracell with $Array.8 billion in cash in exchange for Berkshire Hathaway’s 52 million P&G shares. P&G took over the Duracell business in 2005 as part of the Gillette acquisition.
In a bid to fully exit the batteries business, P&G sold its interest in a Chinese battery joint in 20Array4.
The divesture is part of P&G’s portfolio strengthening and simplification plans to streamline the business and focus more on its biggest brands including the Billion Dollar Brands like Tide, Pampers and Oral-B. The plan was announced in Aug 20Array4.
Under the plan, that is nearing completion, the company has eliminated almost 60% of the brands (roughly Array00 brands) that were witnessing decline in sales and profits.
Under the plan, P&G entered into a deal to sell four product categories, comprising 43 beauty brands to Coty, Inc. COTY in Jul 20Array5. However, subsequent to signing, two fine fragrance brands were excluded from the agreement.
In 20Array4, the company sold off its American and Asian pet care business to Mars, Inc. in July and the European pet care business to Spectrum Brands Holdings, Inc. SPB in December.
In addition, P&G has exited the Bleach business, Vicks VapoStream, Camay and Zest bar soap brands, and several skin care and fragrance brands.
The Beauty brands deal is expected to close in the second half of calendar 20Array6.
At the close of the beauty brands merger with Coty this year, P&G will have a portfolio of about 65 consumer and shopper preferred leading brands focusing on Array0 categories organized under four industry-based sectors. Historically, these brands have grown faster and have been more profitable than others.
P&G currently carries a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment