P&G TO DIVEST RIGHT GUARD, REMBRANDT BRANDS

Moves Required for FTC Clearance of Gillette Acquisition

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CINCINNATI (AdAge.com) -- Procter & Gamble Co. will divest Right Guard deodorant and Rembrandt whitening products as part of the Federal Trade Commission’s clearance of its $57 billion acquisition of Gillette Co., announced today.
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P&G said it will close the deal Oct. 1, and also make Gillette’s Dry Idea and Soft & Dri brands available to the buyer of Right Guard. Earlier this month, P&G agreed to sell SpinBrush, its battery-powered toothbrush, to Church & Dwight for $70 million to $100 million to satisfy antitrust regulators in Europe and the U.S.

No Oral-B, no Glide
The divestitures stopped short of what some antitrust attorneys felt might be required -- including Gillette’s broader Oral-B toothbrush business and P&G’s Glide dental floss. The Rembrandt divestiture does not include the Oral-B name, which Gillette added to the product line last year.

Omnicom Group’s BBDO Worldwide, New York, handles all the Gillette brands targeted for divestiture. WPP Group's MindShare, New York, handles media planning and buying. In all, Gillette spent around $48 million on measured media on the brands last year, according to TNS Media Intelligence -- $26 million of that on Right Guard.

Rembrandt's upswing
While the deodorant brands have been on the decline, Rembrandt, acquired by Gillette in 2003, has been on the upswing as the company increased ad support and took share from P&G’s Crest Whitestrips. Right Guard is the biggest of the brands, with an estimated $150 million in global sales, mainly in the U.S. and U.K. Right Guard has been on the decline in recent years, caught in a crossfire between Unilever’s Axe and P&G's Old Spice.

Potential buyers of the brands include Colgate-Palmolive Co., Japan’s Kao Brands and Germany’s Henkel and Beirsdorf, as well as Church & Dwight and Johnson & Johnson for Rembrandt, according to industry-watchers. But the Rembrandt could be harder to sell, as other oral-care players passed on chances to buy the brand only two years ago, and the once fast-growing mass tooth-whitening market has since slowed.

BBDO holds on
Wile potentially losing Right Guard and Rembrandt, BBDO appears likely to stay on the P&G roster on the all-important razor business, the major prize in Gillette’s portfolio.

Kim Kraus, director of corporate marketing-strategic relationship optimization and a point person on P&G's agency relations, said in her presentation at an Association of National Advertisers Forum earlier this month that the company wants to take advantage of BBDO’s capabilities when it joins P&G's roster. Looking out in the audience at BBDO President-CEO Andrew Robertson, Ms. Kraus said: “Welcome, Andrew. Love you.”

BBDO also gets a boost in its bid to keep Oral-B, since Bruce Cleverly, head of the oral-care business at Gillette, will take over as president-global oral care for P&G.

Other Gillette agencies
Less clear is whether P&G will spread the love to other shops coming in as part of the deal, including independent Acme Idea Co., South Norwalk, Conn., which handles Gillette’s Duracell in the U.S.; and Havas’ Arnold Worldwide, New York, which handles Tag in the U.S.

P&G in recent months has been in talks with and reviewed credentials of Publicis Groupe’s Fallon Worldwide and WPP’s Red Cell, and added independent Wieden & Kennedy to its roster in June.

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