Reckitt & Colman plans to sell the U.K. food division to strengthen its franchise as one of the world's leading household product marketers, analysts said.
The company's food brands include Colman's mustard in the U.K. and French's mustard in the U.S., plus a range of other sauces and condiments. In 1993, the unit's sales were $560 million.
With the acquisition, Reckitt & Colman has moved up to No. 4 from No. 8 internationally in household products sales, behind only Unilever, Procter & Gamble Co. and Colgate-Palmolive Co. The company won't discuss marketing plans, but the top priority is the U.S. market-which accounts for 26% of sales. About 68.5% of the company's $3.2 billion 1993 sales were for household products and toiletries.
"We are reinforcing our position in the U.S. market, which we regard as a strategic priority," said Chief Executive Vernon Sharkey.
"I think it's a good acquisition because they definitely need more mass in the U.S. and this should do it," said Andrew Shore, analyst at PaineWebber, New York. "Reckitt reminds me of a Clorox-type company-good shares in small niche categories but the company needs acquisitions to grow."
Reckitt & Colman's mainstay U.S. brands include Airwick Botanicals air freshener, Woolite fine fabric wash, Old English furniture polish and Easy-Off oven cleaner.
The marketer spends an estimated $60 million on household and food advertising in the U.S.; its agency roster is comprised of Partners & Shevack, TBWA Advertising, Wells Rich Greene BDDP and Ketchum Advertising.
The L&F acquisition brings into the fold Lysol disinfectant sprays, toilet and bathroom cleaners; Resolve carpet cleaner; Rid-X septic tank additives; d-Con rodenticides; Mop & Glo floor waxes; Love My Carpet deodorizers; and Wet Ones hand and face towelettes. Also included are Ogilvie home perms, Chubs baby towelettes and Thompson water sealant.
L&F's agencies in the U.S. are Ammirati & Puris/Lintas, Warwick Baker & Fiore, Jordan, McGrath, Case & Taylor and Slater Hanft Martin, all New York; Ramm Advertising, Cranford, N.J.; and Gilbert, Whitney & Johns, Whippany, N.J. Nearly two-thirds of the estimated $60 million in ad spending goes to the Lysol line.
Dagmar Mussey in Duesseldorf and Jennifer Lawrence in Houston contributed to this story.