In a concerted effort to reduce its number of brands that are not leaders in their respective segments, Procter & Gamble Co (NYSE:PG) has decided to sell them directly as an individual division though IPO. The entire sale of these brands will be through a single sale involving almost 100 of its beauty products.
Procter and Gamble is still fine tuning its decision, with advisors. The company still has to identify the exact products that it will be getting rid off in order to streamline its operations in other areas. Besides, the funds received from the sale proceeds will further help the company to invest in better and more profitable segments. There is however, a slim chance that the company may change its minds about any sale whatsoever.
Some of the brands that are expected to be on the block may include Cover Girl make up, Herbal Essence Shampoo, SKII Skin Cream, along with a range of fragrances from their vast stable. Two of its important brands namely, Olay and Pantene need concentration and new developments to maintain its leading status. With the possibility of this sale going through, the company will be able to do more justice to these products.
Previously, the company was mulling, with the idea of selling its Duracell business to Warren Buffet and simultaneously exiting from the Wella hair care products. According to market experts, each of the businesses that will be sold as individual entities will generate a higher value than presently.
The idea behind the sale of these beauty unit products arose from the declining share on account of lower sales. The recent sales figures from these units reflected that the total turnover and profit have remained the same as they were in 2010. The most aggressive Chief Executive Officer has rejoined the company after resigning earlier. He is well known for his massive acquisition of Gillete Company for $57 billion.