Day chemical industry set off mergers and acquisitions L'Oreal to change or accelerate the acquisition of Avon

Since October last year, the global daily chemical industry has been surging under the influence of capital. After Ding Jiayi married the world's perfume boss Coty was confirmed, Unilever will greet the world's beauty salon ancestor Ya Tao, P & G intends to acquire Beiersdorf, L'Oreal intends to $ 19 billion to win Avon rumors one after another.

Last week, foreign media reported that Unilever plans to purchase toothpaste market champion Colgate for $55 billion. Although similar cross-border acquisitions were mostly silent before the dust settled, the all-round flight of shares was a direct reflection of the market. If these three acquisitions can be successful, Procter & Gamble, Unilever, L'Oreal or will form a full swing in the global market, and in the Chinese market, the domestic local brand's right to speak will be further weakened.

Unilever or $55 billion won Colgate's Unilever acquisition of the US Sally Group's global body care business and the European detergent business can be described as twists and turns - at the request of the EU must sell the Sanex brand to prevent monopoly, and the transaction price From 1.275 billion euros to 1.21 billion euros, Unilever, which has been sticking to a conservative strategy for 10 years, has finally revived in the M&A market.

According to an analyst from UniCredit Bank in an investor report, Unilever will most likely launch an acquisition more than 50% of Colgate’s current market capitalization of 36.8 billion U.S. dollars in the near future, with a transaction volume of up to 55 billion U.S. dollars, and the estimated or through-stock offer The raising of 10 billion euros of funds resulted in the company's gearing ratio reaching 3.7% in the first year after the completion of the transaction.

In this regard, Zeng Xiwen, vice president of Greater China, Unilever, said that at present has not received the relevant acquisition information, Unilever sold the North American toothpaste business more than three years ago, but when the acquisition is successful, will be in Scientific research and sales are complementary to existing businesses. UniCredit analysts also believe that mergers and acquisitions will increase Unilever’s strength in emerging markets, provide economies of scale in the United States, and increase profitability. The reporter learned that Colgate has a 45% share of the global toothpaste market and a single brand share of more than 30% in the Chinese market. The company's black brand can be shared with P&G's Crest. After Unilever stopped its own brand Jie Nuo, the rental brand, China, which is fully built, ranked third. If it can be integrated with Colgate and Black, it will undoubtedly surpass its old rival P&G in the toothpaste market.

Taking a look at Unilever’s M&A history, a recent U.S. billion-dollar special-scale acquisition was already in 2000—a $24bn purchase of Best Food, a large U.S. food manufacturer famous for the production of ready-to-eat soup broth. calm. Since P & G won Gillette for US$57 billion in 2006, the two rapidly widened the gap. In 2009, global sales reached 79 billion U.S. dollars and 59.3 billion U.S. dollars, respectively. Until 2009, the new CEO Paul Polman, a keen merger and acquisition company, joined Unilever to invest 3.9 billion euros in five short-term mergers and acquisitions, including the acquisition of Sally’s business. The 3.7 billion U.S. dollar in progress is negotiating with Alberto Culver.

In fact, Colgate was not the first to be acquired. As early as November 2009, it was reported that Reckitt Benckiser, the world’s largest household cleaning company, intended to launch an offensive. However, due to the similar size of both parties, rumored transactions may take the form of mergers and the amount is only in the order of billions of pounds. At that time, the first analyst who proposed Kraft’s bid for Cadbury’s Nomura Securities stated that perhaps Colgate’s merger with Unilever is more likely. Zeng Xiwen believes that the key to deciding whether or not an acquisition is possible is whether the other party is willing to sell — private companies such as Kaowang are reluctant to sell it; and second, even if the situation is intentional, they must apply for approval from the EU and the US government.

L'Oreal coach to take office or accelerate the acquisition of Avon "everything is possible, the acquisition of this international big brand is purely a game of capital, and the stock price is closely related." Asia Asia general manager of PHPC consulting Gu Jun told reporters. The opinion of the credit analysts also shows that the rumored background is that Colgate’s current earnings multiple is less than 9 times, the lowest level in 10 years.

The latest financial report that the two parties just announced showed that Unilever sales revenue increased by 12% to 10.82 billion euros in the fourth quarter, and net profit increased by 15% to 955 million euros. Colgate’s fourth-quarter revenue fell by 3% to US$3.98 billion from US$4.08 billion in the same period, and net profit decreased by 1% from US$631 million to US$624 million. Perhaps because of the single-brand operation, and most of the revenue came from outside the United States, the performance was highly vulnerable to exchange rate changes. Colgate was lowered by the investment bank CarIS from the target price of 88 US dollars to 83 US dollars, and once again caught in the acquired Rumors.

Two of the same best-selling sex scandals — L'Oreal, the world's largest cosmetics maker, and Avon, the direct selling giant, also released their latest earnings reports in the same period last week. L'Oreal sales in 2010 rose from 17.5 billion euros to 19.5 billion euros, net profit rose from 2 billion euros to 2.24 billion euros, of which China's sales exceeded 1 billion euros, becoming the group's third largest subsidiary. Avon’s revenue for the fourth quarter increased by only 1% to US$3.14 billion, while net profit decreased by 15% to US$230 million, of which China’s total revenue was US$55 million, a decrease of 45% year-on-year and a net profit of US$4.3 million. From a year-round perspective, in 2010, Avon’s global revenue reached 10.863 billion U.S. dollars, a year-on-year increase of 6%, net profit of 1.073 billion U.S. dollars, a year-on-year increase of 7%. China has become the only loss-making region, with a total of 10.8 million U.S. dollars.

At the same time, L'Oréal Financial Advisors revealed that some executives and bankers had long believed that L'Oréal should be changed to a direct sales model to promote penetration in emerging markets, but the current chairman Owen - Jones has always opposed. With the inauguration of Mr. Gong’s attitude towards direct sales on March 17, it may prompt L'Oréal to acquire a direct selling company such as Avon, or the smaller Natura in Brazil and Oriflame in Sweden.

Compared to the above two acquisitions that made the industry excited again with the release of financial reports, last September, Procter & Gamble’s CEO Mai Ruibo’s show of favor to the German chemical giant Baiersdorf Beiersdorf seems to be wishful thinking. According to foreign media, the German Hertz family, which held 50.46% of the shares of Maxim Investment, expressed opposition to possible sale of shares last month. P & G's latest financial report also fell below market expectations, second-quarter sales rose 2% to 213.4 billion US dollars, profits fell from 4.66 billion to 3.33 billion US dollars, it does not seem to have the power to engage in such a large pile of mergers and acquisitions . However, Beiersdorf’s situation is not very optimistic. Its previously announced third-quarter EBIT was EUR 167 million, which was also lower than expected, and lowered its sales growth forecast for consumer products to 2%.

"The current international day-to-day market competition has evolved from a marketing-level price war to a brand war to a capital war. Capital operation has become the quickest way to expand the market and will lead to more and more mergers and acquisitions." Consultant Yang Huabin believes that the three mergers and acquisitions are the reflection of the irreversible trend of the monopoly and merger of giants after the market has developed to a certain extent. Gu Jun emphasized that if the integration is successful, the acquirer’s market share will be more concentrated, leading to a big change in the global cosmetic pattern. “But at the same time, due to the formation of strong brands, the acquisition will not cause the brand to disappear, but only optimize the combination. From this point of view, the process can be seen as the maintenance of the global pattern of daily life."