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JOHNSON & JOHNSON TO BUY REMBRANDT ORAL CARE LINE

FTC Required P&G to Sell Brand as Part of Gillette Aquisition

By Published on .

CINCINNATI (AdAge.com) -- Johnson & Johnson will buy Procter & Gamble Co.ís Rembrandt tooth-whitening brand for an undisclosed sum, the company said today. The move gives J&J its first entry into U.S. toothpaste and substantially expands an oral-care business that includes Reach dental floss and toothbrushes.

As part of its acquisition of Gillette, P&G was required by the Federal Trade Commission to sell off Rembrandt.
Oral-care player
P&G was required by the Federal Trade Commission to divest Rembrandt as part of its acquisition of Gillette Co., which closed Oct. 1. The acquisition appears to signal J&J, which hired McKinsey & Co. in 2004 to evaluate strategic options in oral and skin care, plans to remain a player in oral care.

Rembrandt, acquired by Gillette in 2004, has become a strong No. 2 player in the whitening-strips segment led by P&Gís Crest Whitestrips. The acquisition also expands J&Jís mouthwash business by adding Rembrandt to its existing Act brand.

$100 million brand
Rembrandt had sales of more than $60 million in the 52 weeks ended Oct. 2, according to Information Resources Inc., which doesn't include sales to Wal-Mart Stores, warehouse clubs, dollar stores or professional channels. In all, Rembrandt sales likely exceed $100 million, roughly doubling J&Jís existing oral-care business in the U.S.

Gillette, according to TNS Media Intelligence, spent $33 million in measured media last year behind Rembrandt, which it co-branded with its Oral-B brand. The Oral-B brand wonít be licensed to J&J as part of the deal.

Omnicom Groupís BBDO Worldwide, New York, handles both Rembrandt and Oral-B, while Interpublic Group of Cos.í McCann Erickson, New York, handles most brands in the J&Jís Personal Products Co. unit where Rembrandt is headed. The deal is expected to close before year-end, J&J said in a statement.

P&G agreed to sell its SpinBrush brand to Church & Dwight Co. last month as part of regulatory clearances to buy Gillette.

Still up for sale
Also still up for sale as part of required divestitures is Gilletteís Right Guard deodorant, with global sales of more than $150 million, as well as the Soft & Dri and Dry Idea brands being made available to the winning bidder for that brand. Those brands got $40 million in media support last year, according to TNS, and are expected by industry watchers to attract interest from a wide range of buyers, including Kao Brands, Henkel, Colgate-Palmolive Co. and Church & Dwight.

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