Unilever and Concern Kalina, a leading Russian beauty company, announced Unilever has agreed to acquire 82% of Concern Kalina. The transaction, which is pending required regulatory approvals, values the equity of the total business at RUB21.5 billion (€500 million).
Concern Kalina is one of Russia’s largest local personal care players, with leading positions in skin and hair care and an expected 2011 turnover of around RUB13 billion (€303 million). Concern Kalina is headquartered in Ekaterinburg, where its manufacturing facility is situated. The company has an extensive distribution network and sells its products primarily in Russia, Ukraine and Kazakhstan. It employs approximatley 1,900 people.
Paul Polman, CEO of Unilever, said, "We are delighted to be acquiring Concern Kalina. This will transform Unilever’s personal care business in Russia, giving it leading positions in skin care and hair care, as well as establishing a presence in oral care. It will also strengthen and r-balance Unilever’s portfolio and competitive position in Russia, an emerging market with considerable potential and one of the company’s priority countries."
The transaction fulfills a number of key criteria for Unilever. It:
- enhances Unilever’s presence in an attractive, high-growth market with a differentiated portfolio which has grown at above market rates in competitive categories;
- adds to Unilever’s portfolio successful, authentic Russian brands in skin care, hair care and oral care like Pure Line, Black Pearl, Silky Hands, 100 Recipes of Beauty and Forest Balm, complementing Unilever’s own brands such as Dove, Sunsilk, Timotei and Clear;
- and provides Unilever with the opportunity to use its technology to take these brands to a new level.
Polman continued, "Personal care is a strategic category for Unilever and growing rapidly. Ten years ago it represented 20% of group turnover; strong organic growth has driven it to now reach over 30%, with strong positions in many of the emerging markets. Organic growth remains the cornerstone of our ambition to double the size of Unilever whilst reducing our overall environmental impact. Acquisitions such as Concern Kalina supplement organic growth and add powerful new brands to our portfolio."
Timur Goryaev, chairman of Concern Kalina, said, "The agreement reached with Unilever will enable the brands we have built into some of Russia’s best-loved and most recognized since we started in 1996 to be taken to new heights.”
Alexander Petrov, CEO of Concern Kalina, added, “The coming together of our company with one of the most successful and best-known global companies represents a tremendous vote of confidence in the strength of our brands, the people who have built them and the potential of the Russian market. The combination with Unilever will also provide our employees with opportunities in one of the best companies in the world."
Subject to obtaining the required regulatory approvals, the acquisition is expected to complete by the end of 2011. On completion Unilever intends to launch a mandatory tender offer to acquire the remaining shares that are not part of the initial agreement, at such time and on terms mandated by Russian law.