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P&G eyeing Clairol
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November 21, 2000: 11:08 a.m. ET
Consumer products maker interested in acquiring hair-care line from Bristol
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NEW YORK (CNNfn) - Procter & Gamble Co. is interested in acquiring the Clairol hair-care brand from current owner Bristol-Myers Squibb Corp., P&G has confirmed.
The Cincinnati-based consumer products maker issued a brief statement late Monday indicating tentative interest in the hair-care line, which Bristol-Myers has said it plans to divest. Clairol had sales of about $2 billion last year.
But P&G (PG: Research, Estimates) said it is not considering any swap of its small pharmaceuticals unit to Bristol-Myers in exchange for Clairol. The Wall Street Journal reported Tuesday that P&G "briefly toyed with the idea" of trading its prescription drugs business for the hair-care products, but that the proposal quickly was derailed.
 "P&G plans to review the offering memorandum (for Clairol) once it is issued, but has made no commitments," the company said in a filing with the U.S. Securities and Exchange Commission. "P&G presently is not considering a swap of its pharmaceutical or OTC (over-the-counter) business as part of future discussions with Bristol-Myers Squibb."
New York-based Bristol-Myers (BMY: Research, Estimates) said in September that it would divest Clairol and the Zimmer orthopedic device unit in an effort to focus on its core pharmaceuticals business. Some analysts were surprised at the time that the company would shed Clairol, citing historical reasons. The business was founded in the 1930s by the family of former Bristol CEO Richard Gelb.
Bristol has indicated it would favor spinning off the two businesses or trading them for prescription drug brands owned by another company, saying it hoped to avoid the tax hit of an outright sale.
A P&G spokesman, Tom Millikin, declined comment on whether the two companies have discussed a deal. "Clairol's a strong brand, and it could be a good strategic fit for us," he said. "Beyond that, we need to understand more."
A Bristol-Myers spokesman declined comment.
Other bidders for Clairol also are likely to emerge, the Journal reported. The newspaper, citing sources familiar with the situation, said Anglo-Dutch consumer products maker Unilever PLC is interested, as well as Wella AG and Henkel KgaA of Germany and Japan's Kao and Shiseido.
P&G already owns hair-care brands Head & Shoulders and Pantene. The company could face antitrust scrutiny if it attempts to add Clairol to its product offerings, according to the Journal report.
 In September, Bristol-Myers said it hoped to sell or spin off the Clairol and Zimmer divisions within six to 12 months.
After the divestitures, medicines
should account for 85 percent of the company's revenues, up from the current 72 percent. The company is retaining two non-pharmaceutical units, its Mead Johnson Nutritionals division and the ConvaTec wound care products business.
In morning trading, P&G shares slipped $1.88 to $73.06. Bristol-Myers stock edged up 75 cents to $65.88. 
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