Reckitt Benckiser and Colgate-Palmolive a “good fit” brand-wise
Reckitt Benckiser could be setting its sights on a possible merger with Colgate-Palmolive, according to rumours circulating the City today.
Brand experts say that given the portfolios and similar marketing tactics of the two companies, such a deal would make sense.
Consolidation activity has accelerated within the household goods sector recently with Unilever having snapped up parts of Sara Lee. More recently, S.C. Johnson entered the bidding for the latter’s air-freshener business – a move that would create a formidable player with the combination of S.C. Johnson’s Glade brand and Sara Lee’s Ambi Pur.
Reckitt Benckiser has been a source of much conjecture. Home to brands such Vanish, Cillit Bang and Harpic, the company is reported to be close to announcing a multi-billion pound cross-border transaction. The identity of its target is not yet known, with SSL International and Durex condoms reported to be among the ‘possibles’.
However, a merger with Colgate-Palmolive would be “seamless” from a marketing perspective, say experts.
Don Williams, chief executive at global branding consultancy, pi global, says: “Looking at the similarity in products and personalities of the two portfolios, I see no real mismatch at all. I can see Colgate or Palmolive fitting in seamlessly.
“Both Reckitt and Colgate’s approach to branding is similar – it’s very North American. That is, no compromise, hard-hitting products based on performance, innovation and big ad spend.”
Reckitt Benckiser says that it “invests more in media than any of its competitors – 12.4% of net revenue”. Media spend did fall slightly recently as a result of lower rates, yet savings were investing into other marketing activities, driving up total marketing spend.
The company’s third quarter results showed sales climbed 15% to £1.9 billion, driven by “significant” investment in media, marketing and new products. Revenue in health and personal care brands rose 14%, with brands including Dettol, Nurofen and Gaviscon delivering “excellent” growth.
S.C. Johnson & Son has joined the bidding for Sara Lee’s air-freshener business, according to people familiar with the matter, potentially creating a formidable player in Europe with the combination of S.C. Johnson’s Glade brand and Sara Lee’s Ambi Pur.
