FOR IMMEDIATE RELEASE
THE PROCTER & GAMBLE COMPANY TO ACQUIRE
THE CLAIROL BUSINESS
Acquisition Brings Hair Color to P&G
CINCINNATI, May 21, 2001 - The Procter & Gamble Company (NYSE: PG) today
announced that P&G will purchase the Clairol business from Bristol-Myers Squibb
Company (NYSE: BMY) for $4.950 billion in cash. Clairol is a world leader in
hair color and hair care products with about $1.6 billion in worldwide sales.
The Clairol acquisition launches P&G into the profitable and growing hair
coloring market. Clairol's hair colorant brands include Nice 'n Easy, Natural
Instincts, Miss Clairol, and Hydrience. Clairol also brings some outstanding
hair care brands, including Herbal Essences, Aussie and Infusium.
"Clairol's brands are known and loved by millions of consumers around the
world," said A.G. Lafley, president and chief executive of P&G. "Clairol brings
P&G into the fast-growing business of hair colorants and positions us for
further growth in one of our core business categories: hair care. This
acquisition has all the right elements - leadership brands, attractive margins
and potential for growth. It is a winning combination for our consumers, our
customers, our company, and our shareholders."
BUILDING BLOCKS FOR GROWTH
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This acquisition is expected to contribute about $1.6 billion in sales to
P&G's Beauty Care business. Clairol's hair care products will deliver $900MM in
incremental sales, and the hair colorants will add another $700MM in sales for
P&G, rounding out the company's presence across the total hair care category.
The global colorant segment alone has generated annual growth in the range
of 4-6% over the past five years, about double the growth of shampoo,
conditioners, and styling aids. In fact, men and women are increasingly using
hair coloring as a fashion accessory and usage among younger consumers is on the
rise. This growth rate combined with the profitability of the category provides
a strong platform for continued growth.
"Hair care is a highly competitive and dynamic category driven by the
latest styles and trends," said Bruce Byrnes, President of Global Beauty Care
and Global Health Care at P&G. "Uniting P&G's strengths in hair care and
consumer understanding with Clairol's strengths in hair color will position us
for strong future growth for many years to come. The combination of P&G and
Clairol will also benefit consumers in this rapidly changing market where they
are constantly demanding new innovations and new choices."
WINNING COMBINATION
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The P&G and Clairol combination delivers immediate sales and growth
opportunities and creates significant synergies between the two companies,
including:
. Deeper and broader innovation capabilities by combining the broad range
of hair coloring technologies from Clairol and hair products innovation
from P&G. Clairol has brought seventy new initiatives to market and 850
new formulations in the past 7 years. P&G has brought significant
innovations to the category including 2-in-1 shampoos and breakthrough
conditioner and hair spray technologies.
. Complementary distribution and customer service networks based on the
global reach of P&G in retail distribution outlets and the Clairol
professional network. While Clairol has a presence in key global
markets, approximately 75% of sales occur in North America
(U.S./Canada/Mexico). By contrast, approximately 70% of P&G hair care
products are sold outside of North America, providing a strong network
for expanding Clairol brands.
. Cost synergies from the integration of common marketing, manufacturing,
and business processes. P&G estimates the savings efficiencies from
combining operations to total about $200MM.
THE PURCHASE
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The acquisition qualifies for a joint election tax benefit under Section
338(h)(10) which effectively reduces the cash payment for this acquisition to
about $4.0 billion. This is equivalent to a multiple of 2.5 times sales and 12
times EBITDA. The purchase is expected to have a dilutive effect in year one of
6-8 cents/share. Excluding one-time costs for extended transition services to
Bristol-Myers Squibb and employee retention incentives, year one dilution would
be less than 5 cents. Going forward, P&G expects the purchase to be slightly
accretive in year two.
The acquisition is subject to regulatory approvals.
THE PROCTER & GAMBLE COMPANY
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Procter & Gamble markets approximately 300 brands to nearly five billion
consumers in over 140 countries. P&G's beauty business had over $7.4 Billion in
global sales in 1999/00. Its beauty brands include Pantene, Olay, SK-II, Max
Factor, Cover Girl, Giorgio, Hugo Boss. Based in Cincinnati, Ohio, USA, P&G has
on the ground operations in over 70 countries.
This news release contains forward-looking statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995. In addition to
the risks and uncertainties noted in this release, there are certain factors
that could cause results to differ materially from those anticipated by some of
the statements made. These include the successful and timely outcome of
regulatory reviews, satisfactory operation of the Clairol business prior to
closing, the successful transition of the Clairol business to Procter & Gamble,
and achieving volume, cost and growth projections with respect to the Clairol
business after closing, as well as factors listed in The Procter & Gamble
Company's most recently filed Forms 10-K and 8-Ks.
# # #
Contact: Linda Ulrey, P&G Tom Millikin, P&G Tracey Long, P&G
800-242-3408 800-242-3408 800-242-3408
513-983-8975 513-983-8248 513-945-9845
ANALYST MEETING
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P&G Contact:
Thomas G. Hills (513) 983-2414
P&G will host an analyst meeting on Monday, May 21 at 10:00 a.m. (ET) in
the Forest 2 Ballroom of the W New York hotel, 541 Lexington Avenue, to discuss
the acquisition. For those unable to participate in person, a conference call of
the meeting will be available by calling 800-406-5345 or for International
calls, 913-981-5571. Please use confirmation code 587518.
A replay of the call will be available until midnight, Thursday, May 24 by
calling 800-289-0579, or for International calls, 719-457-2550. Please use the
same confirmation code - 587518.
In addition, the analyst meeting will also be available via webcast on
Monday, May 21, 2001, at 10:00 a.m. (ET). You may link to the web cast by going
to our web site at: http://www.pg.com/investors
Check the main page of the investor site to view the web cast. We suggest
you check in at least ten minutes in advance of the start time to complete the
brief registration process and ensure you are set up to receive the web cast.
# # #
MEDIA MATERIALS ARE AVAILABLE IN THE NEWSROOM AT WWW.PG.COM AND B-ROLL FOR
BROADCAST WILL BE AVAILABLE AT 6:00 A.M., 10:00 A.M. AND 3:30 P.M. AT
COORDINATES: SBS6, TRANSPONDER 4.