Beiersdorf would “have to come to us,” McDonald said today in an interview in Urlati, Romania, when asked if he would look at buying the German company. “The price and the contract would have to be right.”
The CEO of P&G, the largest consumer-products company in the world, aims to add brands worldwide to expand in countries such as Brazil and China, whose economies are outpacing that of the U.S. Buying Beiersdorf would bolster P&G in Latin America and Asia and add to its base of male customers, said Vivienne Rudd, senior European beauty analyst at Mintel in London.
The stock climbed 4 percent to 44.50 euros as of the 5:30 p.m. close of trading in Frankfurt, giving the company a market value of 11.2 billion euros ($15.3 billion). The daily percentage gain was the biggest since Sept. 7, 2009, and the shares earlier climbed as much as 10 percent, the most intraday since April 2003. P&G fell 37 cents to $60.25 at 4:15 p.m. in New York Stock Exchange composite trading.
P&G “can afford to pay whatever Beiersdorf wants,” Rudd said today in a telephone interview. “The question is, would P&G want to buy all of Beiersdorf, or just the beauty business?” The Hamburg-based company is controlled by closely held coffee retailer Maxingvest AG.
Willing to Sell?
Commenting on P&G’s acquisition strategy today, the CEO said the target “has to be willing to sell to us and the price has to be right.” Thomas Schoenen, a spokesman for Beiersdorf, said the company has had no indication P&G is interested.
Since taking over in July 2009, McDonald has looked to developing countries for growth, with about 60 percent of his Cincinnati-based company’s revenue coming from outside the U.S.
At home, the maker of Olay skin products, Pampers diapers and Tide detergent has faced increasing competition from the makers of generic brands, which won consumers during the recession. Net income fell 12 percent last quarter as marketing costs increased, squeezing profit margins.
The company is seeking more luxury skin-care and fragrance brands to tap growth in developing countries, Patrice Louvet, president of P&G global prestige products, said in an interview last week in Milan. Beiersdorf’s La Prairie brand fits with that strategy because of its strength in Asia, said Mintel’s Rudd.
La Prairie Price
“La Prairie operates at a really good price point,” Rudd said. “While aspirational, it’s still accessible for a lot of women.”
Beiersdorf’s roots go back to an 1882 bandage patent. The company introduced the first Nivea cream in 1911 and has used the blue-and-white packaging for which the brand is known since 1925.
Beiersdorf also makes Eucerin skin creams and luxury creams under its La Prairie brand and owns the Tesa SE unit, a maker of adhesive tapes for industrial and private customers.
Maxingvest, the family holding of some members of the Herz billionaire family, also owns the Tchibo coffee retailer. The holding, which has had a stake in Beiersdorf since 1974, became majority owner in 2003 after buying shares from Allianz AG.