CINCINNATI (AdAge.com) -- Henkel today closed its acquisition of Procter & Gamble Co.'s Right Guard, Soft & Dri and Dry Idea brands and is assigning their $30 million to $50 million advertising account to Omnicom Group's Energy BBDO Worldwide, Chicago.
Overseas brands also included
The deal, which also includes the Natrel Plus and Balance brands overseas, covers brands totaling about $275 million in sales globally, about 80% of which are in North America. Henkel said the deal places the company third behind P&G and Unilever in the highly competitive and marketing-intensive U.S. deodorant category, ahead of other global rivals such as Colgate-Palmolive Co., Church & Dwight Co. and Kao Brands.
Right Guard had been the No. 1 men's deodorant only three years ago, but has since slipped behind P&G's growing Old Spice brand and Unilever's even-faster-growing Axe.
FTC forced divestiture
As a condition for approval of P&G's $57 billion acquisition of Gillette last year, the Federal Trade Commission required divestiture of the Right Guard, Soft & Dri and Dry Idea brands. Henkel purchased the brands in February of this year.
BBDO, New York, which had handled the deodorant brands for Gillette, is in the midst of a "knowledge transfer" to the Chicago office, said a spokeswoman for Henkel's Dial unit, which will house the brands in the U.S.
Dial had previously had the rest of its U.S. business with Energy BBDO, and the spokeswoman said the company has no conflict problem with BBDO's New York office continuing to handle the rival Gillette brand, including Gillette series deodorant.
Heavy spending on Right Guard
Gillette spent $29 million on Right Guard last year, according to TNS Media Intelligence, but spent nothing on the other brands. Gillette had put $22 million combined behind Soft & Dri and Dry Idea in 2004.
Right Guard alone has easily topped other Dial brands, which also include Renuzit air fresheners and Purex laundry detergent, in spending in years past.
In comparison, Old Spice and Axe spent $71 million and $50 million respectively on measured media last year, according to TNS.
The FTC's approval of the deodorant divestiture clears the final hurdle to allowing P&G to consolidate the remaining Gillette deodorant business, including Gillette series and Tag, into its own, which also includes the Secret and Sure brands.
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CORRECTION: An earlier version of this story incorrectly reported that the Right Guard account was awarded to BBDO, Chicago. The name of the agency is Energy BBDO.