Could Kao snap up P&G’s Wella hair care unit?

By Michelle Yeomans

- Last updated on GMT

Could Kao snap up P&G’s Wella hair care unit?

Related tags Procter & gamble Investment

Procter & Gamble has reportedly published sale documents for its’ Wella hair care brand, and although the company has yet to comment on the speculation, Japanese giant Kao is among those tipped to be a potential buyer.

Various analysts have been reporting P&G to have been struggling to keep up with rivals like L’Oreal and Estee Lauder in recent years.

Earlier in the month, Forbes reported major divestments in the personal care business after revenues from the beauty division which includes Wella, shrunk by 2% in the 2013 and 2014 fiscal year.

Procter & Gamble reps then revealed in a Consumer Analyst Group conference call that the plan is to divest 100 brands by September, and has sold off its' Camay and Zest soap brands to Unilever to date.

Meanwhile, Wella bought in 2003 for $7 billion, has been a significant player in P&G's portfolio by taking the brand to the number two position in the global professional hair care industry and comes with growth opportunities, particularly in developing country markets.

Kao may be cautious about 'large acquisitions' right now...

The Japanese manufacturer's portfolio already includes global brands in hair care like John Frieda, premium salon brand Goldwell and 'Asience' in East Asia's markets.

Tokyo-headquartered Kao has heavily invested in researching hair colouring technology and developed its first ever foam-type applicator. spoke to Mitsue Konishi, senior innovation analyst at Datamonitor Consumer about where Kao stands as a potential buyer of Wella.

"Kao’s Asience is strong in East Asia, Japan, Taiwan, Hong Kong, Malaysia and Singapore, but its core products are shampoo and conditioner. Hair colourants and styling launches also have not been as global as other categories, like facial care," ​Konishi tells this publication.

The Datamonitor analyst says that if Kao was to acquire Wella, it would expand the brand's geographic and product range as it is strong in styling and retail colour, particularly in India, where Kao has yet to fully tap into. 

"It would be a positive move for Kao, however, the company is still suffering from subsidiary Kanebo’s skin-whitening issue and is expected to pay further compensation to victims (approx. 4000) and may be cautious about large acquisitions right now​," Konishi concludes.

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