Colgate-Palmolive Interested in Unilever?
Jul 22, 2007
Talk of anything like that and you hear different opinions...I got this news from someone and just went to Google to check what is this all about. Different Perspectives, varied facts and speculations have just confused me even more. From what I gather from this whole episode, it just doesn't make sense. I fail to understand the logic why would Unilever sell off its personal care business to a company like Colgate. I do not consider Colgate as a "General" FMCG company with whom I can attach anything. Colgate makes toothpaste. Toothpaste is made by Colgate. Period. Talking of "THE" Household FMCG, only P&G and Unilever fits that bill.
Have you seen at the brand portfolio of Colgate-Palmolive? You will hardly notice any name other than the ones which also appear in their company's name (what a coincidence). So, with 201 years of long history, I presume they are not even good at "Brand Creation". Take for example, India. In India, People refer to Colgate as Toothpaste. They are synonymous. It's dangerous for a brand when people start associating the entire category with the name of the brand. That's what has happened with Colgate (I have absolutely no idea how to solve this. However, I would blame the company for this for no fault of theirs).
Besides, lets talk of Size. How can Colgate possibly swallow Unilever's Personal Care? (forget about the whole Unilever). Or is it the other way round? It is highly unlikely for Colgate to acquire Unilever and if they do, they can not make it work. Some 70-80% (whatever that number is) of mergers and acquisitions fail. Well, this, if it happens, will sure be one of them and if at all, shares will move because of this deal, it will be that of P&G
Have you seen at the brand portfolio of Colgate-Palmolive? You will hardly notice any name other than the ones which also appear in their company's name (what a coincidence). So, with 201 years of long history, I presume they are not even good at "Brand Creation". Take for example, India. In India, People refer to Colgate as Toothpaste. They are synonymous. It's dangerous for a brand when people start associating the entire category with the name of the brand. That's what has happened with Colgate (I have absolutely no idea how to solve this. However, I would blame the company for this for no fault of theirs).
Besides, lets talk of Size. How can Colgate possibly swallow Unilever's Personal Care? (forget about the whole Unilever). Or is it the other way round? It is highly unlikely for Colgate to acquire Unilever and if they do, they can not make it work. Some 70-80% (whatever that number is) of mergers and acquisitions fail. Well, this, if it happens, will sure be one of them and if at all, shares will move because of this deal, it will be that of P&G
1 comments:
Vamsi
said...
1:04 PM
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I agree it is highly unlikely for Colgate to buy out Unilever, but Unilever could buy out Colgate.
The fact is in the long run (23 years)Colgate has been much more profitable than its proxy peer Group: Avon Products, Inc., The Clorox Company, Kimberly-Clark Corporation, The Procter & Gamble Company and Unilever (N.V. and plc)
[on its website :-)]
Companies like P&G and Unilver are great companies but have a very diversified portfolio while colgate is more focussed on certain segments.
I am not sure if colgate has the capabilities to buy them, but is it a strategic fit to buy out Close Up and Pepsodent, I think it will make sense. There are synergies that can be leveraged.