Duracell’s power running out?
10 November 2014 by Ashton Carter
Consumer goods giants, Procter and Gamble, have revealed this week that they intend to exit the personal power business. Although they are yet to make a final decision regarding how they are to leave the market, the most likely course of action is for their battery-manufacturing subsidiary, Duracell, to split-off and form a stand-alone company.
Duracell was acquired by P&G in 2005 along with other brands such as Gillette and Oral-B. The acquisition was originally investigated by the European Commission due to suspicions that it would generate anti-competitive effects in the market. However the acquisition was eventually approved by the Commission which led to P&G overtaking Unilever at the top of the consumer goods ladder.
P&G are now proposing to split-off Duracell with a view to maximising value to P&G’s shareholders. Were this proposal to go ahead, P&G shareholders would be given the chance to exchange their shares for shares in the new Duracell company, with the exact ratio being determined just before the transaction is completed.
Completion is currently being estimated to occur during the second half of 2015 but until that time, alternate exit strategies are being still being considered. When a final decision has been reached, P&G shareholders are set to be the first to be notified.
However, Duracell are not likely to be the only brand dropped. Earlier this year it was announced that P&G were considering selling between 90 and 100 brands in an attempt to cut costs and focus on faster-growing products. This would leave P&G with around 70 core brands which reportedly account for roughly 90% of current sales.
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