June 16, 2015

P&G continues to divest

P&G continues it's strategy to divest slower growth portions of its portfolio with the announcement that Coty has submitted the highest bid for part of P&G's beauty portfolio.

The deal will still have to be finalized but the assets will be spun off into a new company, with P&G still owning some portion of the new company to lessen the tax bill for P&G.

Probably the two biggest brand included in the sale will be cosmetics brand CoverGirl and hair care brand Wella. The remaining part of P&G's beauty business will be it's hair care brands, such as Pantene and Head and Shoulders. Those brands rely mainly on traditional mass market distribution channels.

It's smart for P&G to continue to focus on more strategic and fast growing parts of it's business. In today's business landscape, it's becoming more important to be focused, quick and flexible. Being big is still important (yes, you need P&G's size and scale to get your products on shelf), but it's importance is slowly diminishing. P&G realized this a while back and it has followed through on its strategy, a strategy that will likely see it continue to be successful for many years to come.

Link to the original article from Ad Age here