Unilever sells deodorant brands at official behest

Last week, Tiger Brands said it was buying men's deodorant brand Status from Unilever for an undisclosed sum to assist its fast moving consumer goods rival to comply with conditions placed by competition authorities on the South African portion of Unilever's €1.3 billion purchase of Sara Lee's personal care brands.

The local Status deal echoes Unilever's €672 million sale of Sanex to Colgate-Palmolive which is under way to comply with the European Commission's ruling that it divest from the additional deodorant brands it gained from Sara Lee.

The European Commission said in its December ruling: "The commission's in-depth investigation has shown that the merger would give Unilever a very strong leadership position in a number of deodorants markets by combining the parties' brands, most notably Sanex with Dove and with Rexona, which at present compete against each other."

In SA, Unilever's deodorant brands include Axe, Shield, Dove and now Radox following the Sara Lee deal.

Unilever SA spokeswoman Tilottama Pillai said the condition imposed by the South African authorities that Sara Lee's Status brand had to be sold predated the European Commission's ruling on Sanex.

"The merger was approved here before it was in Europe. Interestingly, our competition authorities did not raise Sanex as a problem.

"But since Sanex is a global product, it is being sold to Colgate-Palmolive in SA along with all other countries," Pillai said.

Though Status belonged to US-based Sara Lee, the multinationals view it as a specifically South African brand.

In both cases Unilever is linking its competition authority-ordered sale of deodorant brands to an acquisition.

In the Tiger Brands case, Unilever is buying foam bath and lotion brand Mousson.

Since the purchase of Status and the sale of Mousson fall below the JSE threshold for public disclosure, Tiger Brands has not provided deal values.

But it said Status's annual turnover is about R100 million and Mousson's R24 million.

Unilever is acquiring Colgate-Palmolive's detergent brands in Colombia for US$215 million.

Pillai said these were not brand exchanges since the value of the businesses in each case are very different.

Source: Business Day