No Deal Yet in Unilever-P&G Espionage Talks

Unilever and Procter & Gamble will resume discussions tomorrow regarding the settlement over P&G’s corporate-espionage activities to glean secrets about Unilever’s hair care business, according to The Wall Street Journal. Discussions broke off Friday night.

The companies had set an informal deadline for Friday night, but “sense prevailed” and they discontinued discussions around 7 p.m. in New York Friday, taking the U.S. holiday weekend to regroup, according to a person familiar with the talks. Negotiations were near a resolution, but “they ran out of time” and will reconvene Tuesday, this person said.

The talks are being led by Charles Strauss, president of Unilever’s personal care business in the U.S., and John Pepper, P&G’s chairman. The talks took place in Unilever’s headquarters in New York. Last week, Mr. Pepper flew to London to meet with Niall Fitzgerald, Unilever’s co-chairman, in order to smooth the negotiation process, this person said.

The discussions between the two companies started in April after P&G told Unilever its so-called competitor intelligence contractors had taken improper steps in spying on Unilever’s hair care division. The talks have continued as Unilever attempts to learn exactly what information P&G obtained after the spies grabbed documents garbage dumpsters outside Unilever’s Chicago offices.

Unilever is seeking an independent auditor to monitor P&G’s hair care business, particularly new product launches, over the next several years. In addition, the companies are discussing the reassignment of some P&G hair care executives to different parts of the company and a cash payment to Unilever, somewhere between $10 million and $50 million, depending on the other terms of the agreement, according to people familiar with the discussions. Unilever is pushing also for a delay to certain P&G product launches until the end of 2003, these people said. During the six-month espionage operation, P&G acquired roughly 80 documents from Unilever’s hair care operations, according to Stephen Milton, a Unilever spokesman.