Consumer products company Procter & Gamble Co has decided to exit its battery business, possibly by splitting off its battery brand Duracell into a stand-alone company, as part of its efforts focus on brands that are growing fast, as per a press release.
Earlier in August, P&G had said that it could sell about half of its slow-growing brands in two years. The world's second-largest battery business Duracell was widely considered to be one of the largest assets that P&G was likely to divest.
The world's No. 1 household products maker P&G, whose brands include Pampers diapers and Tide detergent, would first divest its stake in a China-based battery joint venture for an undisclosed amount and then exit Duracell completely.
The company said that it has not frozen the form of its exit from Duracell, whether it will be a split-off, spin-off, divestiture or some other scenario, as it is considering alternatives that offer better value to shareholders. The first preference is, however, a split-off in which P&G shareholders would be given the option of exchanging “some, none or all of their P&G shares for shares in the newly formed Duracell company.”
“We greatly appreciate the contributions of our Duracell employees. Since we acquired the business in 2005 as part of Gillette, Duracell has strengthened its position as the global market leader in the battery category,” said chairman, president, and CEO A G Lafley.
“It’s a business with attractive operating profit margins and a history of strong cash generation. I’m confident the business and its employees will continue to thrive,” he added.
In India, P&G operates a public listed arm and also sells Duracell. However, Duracell is not part of the listed subsidiary in the country.
(Edited by Joby Puthuparampil Johnson)