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WARNER-LAMBERT's $ 142 MIL. WILKINSON SWORD PURCHASE OPENS NEW DISTRIBUTION

This article was originally published in The Tan Sheet

Executive Summary

WARNER-LAMBERT's $ 142 MIL. WILKINSON SWORD PURCHASE OPENS NEW DISTRIBUTION channels in Europe for the company's OTC lines, Warner-Lambert Chairman Melvin Goodes noted. In a March 22 announcement of the deal, Goodes pointed out that in addition to expanded wet-shave market share, "Wilkinson's competitive position in the European market also provides us with a vehicle to launch other over-the-counter and personal care brands through existing distribution channels." Wilkinson, a Solingen, Germany-based razor and blade manufacturer, posted 1992 sales of $ 190 mil. in the U.S., Canada, and Europe. W-L's Schick business generated $ 316 mil. in worldwide sales last year. The purchase from Wilkinson's Dutch parent Eemland Holdings was financed through cash and short-term borrowing. W-L's brands include Listerine and Cool Mint Listerine mouthwashes, Halls cough tablets, the Benadryl antihistamine line, Rolaids antacid, Efferdent denture cleansers, Anusol hemorrhoidal products and Lubriderm skin care products. The firm said it has not yet determined what products will be expanded into Europe. Goodes also said the acquisition provided "opportunities for synergy in manufacturing and marketing." Warner-Lambert said it currently does not plan to consolidate facilities, and all of the 1,100 Wilkinson employees will be retained. In addition to its Solingen headquarters, Wilkinson's facilities include a manufacturing plant in the same city, as well as plants in Kramlington and Acton in the U.K. The company has a small U.S. distribution facility in Atlanta. Worldwide sales for the Schick Tracer shaving system, introduced in January 1991, were close to $ 50 mil. in 1992 and are expected to reach $ 70 mil. in 1993, W-L said. Although there have been discussions regarding bringing to the U.S. Wilkinson's Protector shaving system, which launched last year in Germany, the U.K. and France, the company has no immediate plans to do so. Wilkinson's other products, including shaving gels, soaps and foams, are not sold in the U.S. Wilkinson holds a 40% share of the wet shave market in Germany and a 17% marketshare in the U.K. Warner-Lambert's shaving business is strongest in the U.S. and Japan, where it has over 60% if the market. The Wilkinson acquisition marks the third transaction W-L has completed in Europe this year. In January, the company announced its purchase of a 34% stake in the French pharmaceutical company Jouveinal for $ 200 mil. Earlier this year, Warner-Lambert also acquired SME S.p.A., an Italian confectionary company. In November, European antitrust officials ordered Gillette to sell its 22% non-voting interest in Eemland, citing the threat of weakened competition in the wet shave market. In 1990, Gillette was blocked from acquiring the U.S. Wilkinson Sword business.

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