P&G Makes Initial Bid for Beiersdorf

According to a Reuters report, Procter & Gamble has given Allianz AG a rough idea of what it may be prepared to pay for the insurer’s 43.6% stake in Beiersdorf, the German manufacturer of Nivea skin care. But industry sources said the preliminary price indication from the U.S. consumer products giant did not meet Allianz’s expectations and an agreement was not imminent. Allianz, which declined to comment, wants to sell its stake in Beiersdorf as part of a strategy to dispose of substantial industrial holdings.

A sale would raise billions of euros for Allianz, which has seen the equity market slump consume much of its excess capital. Under German takeover law, P&G would have to make a public offer to all Beiersdorf shareholders, including German coffee-to-retail group Tchibo, if it acquired Allianz’s stake.

Buying Nivea would help P&G, maker of Oil of Olay, close the gap on France’s L’Oreal in the skin care market and reinforce its presence in western Europe, where its business has not been growing as fast as the company would like. A P&G spokeswoman declined to comment.

Allianz’s stake was worth about 3.5 billion euros ($3.45 billion) at Tuesday’s close. Beiersdorf’s market capitalization stood at 8.3 billion euros, according to Reuters data.

Industry sources said last week both P&G and family-owned Tchibo, which owns 30.6% of Hamburg-based Beiersdorf, had held preliminary talks with Allianz but that the insurer was still some way off deciding what to do with its shares.