Henkel in a statement said it paid $420 million for Right Guard, Soft & Dri and Dry Idea brands, which had global sales of $275 million last year. Right Guard, which was passed in recent years by P&G's Old Spice and Unilever's Axe in men's deodorants, is the No. 3 brand in the segment.
Dial mans up
The deal makes Dial a much bigger player in men's personal care, as its flagship deodorant soap and Coast products already skew toward men. It could also make Dial a bigger advertiser: The acquired deodorant brands received more than $35 million in media support in 2004, according to TNS Media Intelligence, before Gillette began to pull back support last year given the likely divestiture of the brands.
The Gillette deodorants traditionally have gotten more media support than the rest of Dial's portfolio combined, including Dial, Coast, Renuzit and Purex.
To get its $57 billion acquisition of Gillette approved by the Federal Trade Commission in October, P&G was required to sell the brands.
BBDO could keep control of the account. The agency's New York office handled the brands for Gillette. Its Chicago office is agency of record for Dial brands.
Henkel's entry into deodorants comes amid some major marketing changes in the category. In the face of Unilever's steady ascent in recent years behind Axe and Degree, P&G this month dropped its longtime Old Spice agency, Publicis Groupe's Saatchi & Saatchi, New York, in favor of Wieden & Kennedy, Portland, Ore.
Dial's purchase also leaves other smaller players in deodorant facing some big choices. Analysts familiar with the matter said Church & Dwight Co. and Japan's Kao Brands were also interested in the Gillette brands.
One person familiar with the matter said acquiring the brands was a make-or-break factor for the Church & Dwight deodorant business, which has been declining amid major marketing inroads by Unilever and P&G.
A Church & Dwight spokeswoman did not return calls for comment at presstime.