P&G Makes Hostile Bid for Wella

Procter & Gamble, Cincinnati, OH, has made a takeover approach to the family that controls Wella, the German hair care group. The Stroeher family is not actively seeking a buyer for its 80% stake, and is understood to have dismissed P&G’s recent offer as too low. The family last autumn rejected an offer from Henkel that would have valued the company at $5.7 billion.

P&G’s offer was not made public, and the talks are not considered ongoing. The family, which is split into two factions, is not seeking to sell the investment. The family groups could come together if they receive an offer they consider attractive, a person familiar with the situation said. Wella declined to comment on P&G’s approach.

AG Lafley, president and chief executive of P&G, in January said the company planned to meet up to one-quarter of its long-term sales growth target through acquisitions. Mr Lafley said that P&G needed to expand its hair care business, notably in Europe.

P&G in 2001 bought Clairol, the hair products group, and last year approached shareholders of Beiersdorf, the German beauty products company that makes Nivea cream. Beiersdorf’s two main shareholders are Allianz, the German insurer, and the Herz family that last year sold Tchibo, the tobacco group. The Herz family has not been a willing seller since disposing of Tchibo, and Alliaz has in the past rejected approaches as too low.

Industry observers said Beiersdorf is a better fit for P&G because it is bigger than Wella, and its Nivea brand is a strong one. It also has existing distribution channels through retailers, which is how P&G sells its products. Wella sells its products to and through professional hair salons.