Consumer goods giant Unilever (NYSE:UL) is buying 82% of Russia’s largest cosmetics group, Concern Kalina, for about $685 million. The move means Unilever will overtake L’Oreal as the No. 2 personal-care products company in Russia.
Anglo-Dutch Unilever said the acquisition expands its presence in the emerging market, where the personal care sector is growing more than 10% annually, putting it just behind U.S. rival Procter & Gamble (NYSE:PG).
The deal is expected to “strengthen and re-balance Unilever's portfolio and competitive position in Russia, an emerging market with considerable potential and one of our priority countries," Unilever CEO Paul Polman said in a statement.
The move also helps grow Unilever’s personal care business, which has increased to 30% of group turnover from just 20% a decade ago, while establishing Unilever’s oral care presence in Russia and propelling the company to a leadership role in Russia’s skin care and hair care markets.
The purchase is expected to add Russian brands such as Pure Line and Silky Hands to Unilever’s own skin care lines such as Dove and Sunsilk.
Concern Kalina, based in Ekaterinburg, some 1,056 miles east of Moscow, sells its products primarily in Russia, Ukraine and Kazakhstan, under about 1,900 employees.
The transaction, pending regulatory approvals, is slated to close by the end of this year.