Broker snap: Unilever bulks up in hair styling

27th Sep 2010 13:16

The acquisition by Unilever of US-based Alberto Culver for $3.7bn in cash is a big deal, both in a literal and colloquial sense, according to Charles Stanley, which has reiterated its recommendation to accumulate shares in the consumer products giant.Jeremy Batstone-Carr, head of private client research at Charles Stanley, thinks the deal "invigorates Unilever's presence in North America" and will put the squeeze on its US rival Proctor & Gamble (P&G). Alberto Culver's best known products, the TRESemmé, Nexxus, VO5, St Ives and Simple brands go up against P&G's Pantene, Herbal Essences, Head & Shoulders and Clairol products. "Alberto Culver propels Unilever to the world's leading manufacturer of hair conditioning products, No 2 in shampoo and No3 in styling," Batstone-Carr notes. "Personal care has performed strongly for Unilever of late, boosted by strong sales of Suave and Degree (shampoo and deodorant respectively) in the US and bolstered by the roll-out of a range of Dove for men products worldwide earlier in 2010," Batstone-Carr continued. "A decade ago the division accounted for c20% of group turnover, now it accounts for c.30% as its importance within the business has increased and significant positions have been achieved in key emerging markets, particularly those countries with fast-growing populations in excess of 100m people," Batstone-Carr said.