In the Wall Street Journal on September 28th, it stated that Unilever is paying $37 million for Alberto Culver, a deal that may be looked as a trick. This new acquisition should increase Unilever's after-tax profit .5 percent. In the future, Unilever will need to expand its beauty products such as TRESemme because this part of the company is only a small part of the sales at this moment in time. This acquisition has also made Unilever the "world's top supplier of hand conditioner and No. 2 in shampoo to add to its leading position in deodorants." However, competition is growing with L'Oreal and Procter and Gamble right up with Unilever in the hierarchy.
This competition is proving to be a good thing for Unilever. Without it, they probably would not have tried to buy Alberto Culver or any other companies they have acquired. They wouldn't have to because there would be no threat of anyone taking over their company. But the question is: will this very steep price paid for Alberto Culver actually pay off?
http://online.wsj.com/article/SB10001424052748704654004575518103803288226.html?mod=WSJ_Consumerproducts_leftHeadlines
This acquisition will continue to increase the rate of sales increase for Unilever; however, whether this steep price will pay off is a function of other companies in the industry. P&G hopes to cut its costs by reducing waste, so this move would allow P&G to cut its prices, in turn pressuring Unilever and other companies to make similar business adjustments in order to compete. Unilever must be cautious in its spending to ensure that its acquisition pays off.
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