EC scrutinises Unilever’s purchase of Sara Lee

The number and breadth of brands involved in Unilever’s acquisition of the Personal Care and European Laundry business of the Sara Lee Corporation will now see the deal analysed market by market by the European Commission (EC).

Sara Lee brand Radox
Sara Lee brand Radox

Under the terms of the €1.275bn offer (£1.16bn at the time in September), Unilever will acquire a portfolio of more than 90 brands, across a number of different categories in 19 European countries. These include Radox, Brylcreem and Sanex.

In moving to Phase II of its analysis of the acquisition, the EC says it needs “more time” to determine the full implications of the deal from a competition perspective on particular European markets.

Unilever says it “welcomes the opportunity to engage more fully with the Commission’s competition authorities”. The process will balance the legitimate interest of the Commission with the company’s desire to maximise the opportunities from an acquisition that will deliver more value to consumers, customers and investors, says the company.

Unilever chairman Dave Lewis has said the addition of Sara Lee’s personal care business will allow the consumer goods company to reach different customer segments by enabling it to sell “value and mid-tier products” in the UK and Ireland.

However, some analysts have suggested the purchase isn’t in line with the company’s global strategy.

Speaking to Marketing Week on the back of the announcement in September, Colin Hession, managing director of specialist toiletry and cosmetics consultancy Colin Hession Consulting said: “Why would Unilever, having only recently got rid of its own long tail of small local brands, want to acquire a whole lot of someone else’s?

“Unilever has been talking about multi-country brands over the past five years, and now suddenly it buys Sara Lee’s ragbag of one-country and two-country brands – exactly of the sort they’ve been getting rid of,” he adds.

The deal is on track to be completed in the last quarter of 2010. The Sara Lee personal care and European laundry brands are maintaining “strong levels of growth” and Unilever continues to believe the deal will play a significant role in accelerating its growth in Western Europe.

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