| NEW YORK
NEW YORK Aug 18 Procter & Gamble Co is
working with advisors including Goldman Sachs Group as
the world's largest household products maker reviews up to 100
underperforming brands for potential divestiture, people
familiar with the matter said.
While P&G has yet to determine which brands it will seek to
shed, Duracell batteries and Braun shavers are the two largest
assets likely to be divested, the people said, asking not to be
named because the matter is not public.
The company, which also makes Gillette razors and Tide
detergent, said this month it would consider selling more than
half its brands whose sales have been declining for the past
three years, a drastic attempt to revive growth and save costs.
These brands up for review are estimated to have roughly
$900 million in earnings before interest, tax, depreciation and
amortization (EBITDA) combined, the people said.
Duracell, the world's No.1 battery business, alone accounts
for the majority of the value with estimated EBITDA of around
$500 million, according to one person. Braun is the next largest
brand likely to be shed, with less than $100 million in EBITDA,
that person added.
Several private equity firms have already started exploring
potential deals involving various P&G brands, according to the
people familiar with the matter.
Representatives for P&G could not be immediately reached for
comment. Goldman Sachs declined to comment.
P&G did not name any of the brands it planned to sell but
Chief Executive A.G. Lafley said the company would narrow its
focus to 70 to 80 of its biggest brands, which include Pampers
diapers and Tide detergent.
These top brands generate 90 percent of its $83 billion in
annual sales and over 95 percent of its profit.
The sweeping move is a major strategy shift for the consumer
products giant, whose revenue growth has been sluggish, with
sales missing Wall Street's estimates in nine of the last 13
It also reflects a wider trend among conglomerates across
various industry sectors to streamline their business lines, by
shedding non-core operations and allocating resources to high
Large consumer companies like Nestle SA and
Unilever Plc have shed underperforming businesses in
the last year to focus on their top brands.
Healthcare giants including Merck & Co, Abbott
Laboratories and GlaxoSmithKline Plc have also
moved to shed their declining mature drug businesses in recent
P&G says it has been hurt by "choppy" growth in developed
markets, tough competition and a strengthening U.S. dollar. The
company has sought to cut expenses by streamlining management,
reducing costs and cutting jobs under a five-year, $10 billion
restructuring plan announced in 2012.
(Additional reporting by Greg Roumeliotis; Editing by Chizu