Unilever sharpens P&G rivalry by buying Dollar Shave Club
By Martinne Geller and Ismail Shakil
(Reuters) - Unilever Plc (ULVR.L: Quote) is to buy U.S.-based Dollar Shave Club, expanding its presence in the growing market for male grooming products and sharpening its rivalry with Procter & Gamble (PG.N: Quote) which owns the Gillette brand.
The surprise move by Unilever, which makes Axe body spray and Dove soap, shows how e-commerce is disrupting the market for consumer packaged goods.
It also reduced the attractiveness of rival razor maker Edgewell Personal Care EPC.N as a takeover target, analysts said, sending its shares down 1.9 percent.
Unilever, P&G and others have put more focus on men in recent years, trying to coax them into spending more on deodorants, skin creams and hair products.
Terms of Unilever's deal, announced late on Tuesday, were not disclosed. However, Fortune cited sources saying it is paying $1 billion in cash for the company, which sells razors and blades directly to consumers via online subscriptions .
Unilever declined to comment on the report.
Dollar Shave Club's turnover is expected to grow to over $200 million in 2016 from $152 million last year, Unilever said.
Based on those figures, Unilever would be paying five times annual sales for Dollar Shave Club, higher than most U.S. consumer deals, which get done at below four times. Continued...