Kao to Buy John Frieda for $450 Million

Kao Corp., Tokyo, Japan, will buy CT-based John Frieda Professional Hair Care Inc. via its Andrew Jergens Co. unit for $450 million. The purchase of John Frieda Professional Hair Care is part of Kao’s global strategy to focus on the U.S. market.

The move, Kao’s biggest step ever in the U.S., marks further progress by Japan’s largest manufacturer of home-use products into global markets. In 2001, Kao lost the bid for Bristol-Myers Squibb’s Clairol hair care business to Procter & Gamble. In 2000, Kao bought the Ban line of antiperspirants and deodorants from Chattem Inc. though Andrew Jergens for $166.5 million.

Established in 1989, John Frieda Hair Care markets premium shampoos, conditioners and styling agents. Its sales are expected to reach $160 million this year and it commands a 6% share of the North American hair care styling market, Kao said.

Kao president Takuya Goto said his company aims to raise $833 million in sales in the U.S., from $350 million billion in the financial year ended March 2002. Mr. Goto said potential growth in the hair care business is larger in the U.S. compared to Japan where growth is only 1-2% a year. The North America hair care market expands 4-5% a year.

Executives expect the acquisition of John Frieda Professional Hair Care to be synergistic with its hair care business in Germany and the Netherlands. John Frieda chalks up 35% of its annual sales in the European market.