Unilever-Colgate merger rumours surface again

12 July 2007

Mumbai: The world''s second-largest maker of food and detergents, Anglo Dutch firm Unilever Plc, may combine with Colgate-Palmolive more than eight years after speculation started that the cosmetics major may be interested in taking over all or a part of the FMCG giant.

Unilever''s personal care products include brands like Sunsilk, Pond''s, Dove, Axe, Rexona and Vaseline. New York-based Colgate makes Softsoap and Irish Spring as also its toothpaste brand Colgate.

Some analysts said Colgate-Palmolive may be interested in buying a stake or purchasing the entire company, while others said Unilever may be the possible buyer.

In India, a merger of Unilever subsidiary Hindustan Unilever (HUL) and Colgate Palmolive will create a Rs14,000 crore conglomerate which would command more than 60 per cent market share in toothpaste alone.

Both Colgate and HUL are competing in the Rs2,500 crore toothpaste segment, with Colgate controlling nearly half of the market. HUL is the market leader in personal care, fabric care and food product businesses

Unilever shares closed 2 per cent up after a rise of 4 per cent on FTSE and 2 per cent in Amsterdam amidst the rumours of takeover.

The rumoured takeover, analysts say, is positive news for Lever, considering the lacklustre performance it had for many quarters now. Colgate also gained on rumours that it would acquire a part or whole of Unilever.