The transaction includes a portfolio of brands with leading positions in the entry-level price segment, with major brands such as Pert, Shamtu, and Blendax, all holding leading positions in the shampoo segment in these emerging markets; with sales in 2015 for the brands amounting to almost $100 million.
The hair care maker identifies Russia, Saudi Arabia and Turkey as the key countries to target and says that with the acquisition, it will expand its footprint in emerging markets and strengthen its position in some of the largest and fastest growing markets in Africa/Middle East and Eastern Europe.
“This acquisition is part of our strategy to further strengthen our footprint in emerging markets and to invest in strong country category positions. We are convinced that emerging markets will continue to generate above-average growth in the future,” says Hans Van Bylen, Executive Vice President and responsible for Henkel’s Beauty Care business.
“These brands are a perfect fit for our Beauty Care business. They will strengthen our existing core category hair care and provide a platform for further expansion.”
Building success
This agreement builds on a deal that Henkel and P&G made in May 2014, when the former acquired the Pert brand in Latin America, and German firm says that the latest transaction will help to further consolidate the Pert brand into its portfolio.
Both parties agreed not to disclose any financial details about the transaction, and closing of the acquisition is subject to approval from anti-trust authorities.
It comes at a time when Henkel announced that emerging markets were key to continuing its growth, particularly in beauty.
In its results for 2015 the company reported organic sales growth of 3% to €18,089 million, while the Beauty Care business unit also extended its profitable growth of previous years with 2.1% organic sales growth to €3,833 million.
“Emerging markets continued to be the main growth drivers contributing to our good performance. We also achieved further organic sales growth in mature markets,” says Henkel CEO Kasper Rorsted.
“Despite the difficult economic environment, we delivered a strong financial performance, continued to successfully implement our strategy and laid a strong foundation for our future. After three years of our four-year strategy cycle, we are well on track to meet our main targets for 2016.”