Unilever paying $3.7 billion to acquire US-based beauty products maker Alberto Culver

Unilever to buy Alberto Culver for $3.7 bln

AMSTERDAM — Consumer products maker Unilever NV said Monday it has agreed to buy Alberto Culver Co., the U.S. maker of beauty products such as TRESemme, VO5 and Simple, for $3.7 billion in a management-backed deal.

Unilever, which makes Dove soaps, Axe deodorants and Suave shampoos, said it will offer $37.50 per share for Alberto Culver, a 19 percent premium to its closing price in New York on Friday. The deal must be approved by regulators and Alberto Culver shareholders.

Unilever Chief Executive Paul Polman said in a statement Alberto Culver will fit well with his company’s current beauty range.

“Personal Care is a strategic category for Unilever and growing rapidly,” Polman said in a statement.

Although Unilever intends to grow mostly via its existing brands “Bolt-on acquisitions such as Alberto Culver supplement organic growth and add powerful new brands to our portfolio,” he said.

He said the deal would add to Unilever’s per-share earnings in the first year.

Unilever, with dual headquarters in London and Rotterdam, Netherlands, is the world’s third-largest maker of consumer products behind Procter & Gamble and Nestle. Some of its other well-known products include Ben & Jerry’s ice cream and Lipton tea.

Alberto Culver, based in Melrose Park, Illinois, has a market capitalization of about $3.1 billion based on Friday’s closing stock price of $31.48.

Unilever shares were up 2 percent to euro22.28 ($29.88) in early trading in Amsterdam.

Graham Jones, analyst at Panmure Gordon & Co., said the price was “on the high side” but he saw it as positive for Unilever.

“It further skews Unilever to high growth, high margin personal care categories, gives a more rounded category presence in hair care and makes it global leader in hair conditioning, No. 2 in shampoo and No. 3 in styling.”

Unilever said the deal added styling and conditioning brands like TRESemme and Nexxus to its U.S. portfolio, complementing its own brands which include Suave, Dove, Sunsilk and Pond’s.

The Anglo-Dutch company said it would use its scale and distribution prowess to promote Alberto Culver’s brands more aggressively in their existing markets, and to introduce them to emerging markets.

Alberto Culver generated sales of around $1.6 billion and operating earnings of around $250 million for the 12-month period ending June 30 2010, Unilever said.