Unilever NV and the U.S. Department of Justice have reached an agreement to settle antitrust concerns over the European consumer products giant's $3.7 billion acquisition of hair care company Alberto Culver Co.
The Justice Department said the deal as it was originally constructed would have significantly reduced competition in the market for low-price shampoo, conditioner and hairspray. Under a settlement announced Friday, Alberto-Culver will divest its VO5 hair care brand in the U.S. and Unilever will sell off its Rave brand in the U.S. The companies will continue to offer the brands outside the U.S.
The Alberto VO5 brand consists of shampoo and conditioner, hairspray, mousse and other hair styling products. The Rave brand consists of hairspray and mousse.
The original proposal would have left Unilever with approximately 90 percent of the U.S. market for low-priced shampoo and conditioner and 46 percent of the U.S. hairspray market, which could have led to higher prices for consumers, the Department of Justice said in a statement.
The acquisition will make Unilever, based in the Netherlands, the world's leading company in hair conditioning, the second-largest shampoo seller and the third-largest maker of hair styling products. In addition to VO5, Alberto Culver, based in Melrose Park, Ill., near Chicago, makes personal care products under the TRESemme, Nexxus, St. Ives and Noxzema brands, among others.
The deal was announced in September and approved by Alberto Culver's shareholders in December. It is now expected to close on Tuesday
Alberto Culver said in a statement that its brands and Unilever's will continue to compete in the five other countries where the deal still needs approval, including the U.K. and Argentina.
Unilever said the deal continues a series of acquisitions that includes the home and personal care products of Sara Lee in 2010, the hair-care company TIGI in 2009 and ice cream businesses in Russia, Greece and Denmark.
Alberto Culver's shares were unchanged Friday at $37.47.
Unilever's shares rose 14 cents to close at $32.51.