The Telegraph
Since 1st March, 1999
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Procter wants Nivea in its make-up kit

Frankfurt, Sept. 23 (Reuters): US consumer products giant Procter & Gamble is in talks with Allianz AG to buy the insurer’s 43.6 per cent stake in Beiersdorf, maker of Nivea skin products, the Financial Times reported on Monday.

The newspaper cited industry sources as saying Procter & Gamble had already approached the German insurer and that an offer would follow within the next few days.

Allianz wants to sell its stake in Beiersdorf, which owns the highly successful Nivea skin care range and Elastoplast brand, as part of its strategy of disposing of substantial industrial holdings. Its stake is worth about 3.2 billion euros ($ 3.14 billion) at Friday’s closing price of 86 euros. Beiersdorf’s market capitalisation is 7.2 billion euros.

Under German take-over law, P&G would have to make an offer to all Beiersdorf shareholders, including family-owned Tchibo Holding, if it bought Allianz’s stake.

Tchibo, a coffee and retail group rich with cash after selling German tobacco company Reemtsma earlier this year to Imperial Tobacco, has also talked to Allianz about buying its stake, industry sources said. Tchibo, which owns about 30 per cent of Beiersdorf, would not have to make a full bid for the company if it increased its stake. It has said it would be open to a deal whereby part of Allianz’s stake would be floated.

That would increase Beiersdorf’s free-float and increase its chances of promotion to the blue-chip DAX index but could be embarrassing to Allianz, which bought more shares at the start of the year with a view to strengthening its hand in any talks on a change of ownership.

Beiersdorf shares have fallen about 40 per cent since hitting a record high of 144 euros in February.

Tchibo chief executive Reinhardt Poellath said last month he wanted an agreement with Allianz by the end of the year.

P&G and France's L’Oreal have a strategic interest and the financial clout to carry off a take-over but were put off earlier this year by the price Allianz was demanding and the chance that Tchibo may remain as a minority shareholder. Sources have also said that Beiersdorf management may oppose a take-over by L’Oreal or P&G.

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