Close on the heels of reports suggesting that Colgate-Palmolive Company (NYSE:CL) could be looking to sell itself, there are at least three companies that could be the possible suitors for it. Corporate is looking for merger and acquisition to boost sales growth and profitability through cost saving synergies as the product launches and associated costs could be bigger than this due to the competitive market environment throughout the globe.
Unilever plc (ADR) (NYSE:UL) could be one of the potential suitors for Colgate-Palmolive. The company enjoys a market cap of about $162.90 billion, which is more than the American firm’s $63.58 billion as of May 16 closing price. The company could use the acquisition to satisfy investors and prevent Kraft Heinz Foods Co (NYSE:HNZ) from making another bid on the company. Kraft’s earlier bid was effectively foiled by Unilever with overwhelming shareholders support.
Procter & Gamble Co (NYSE:PG) is another possible company with a potential to buy Colgate-Palmolive. The company’s market cap is about $220.93 billion. The most recent quarter’s revenue suggested that its top line fell to $15.605 billion from $15.755 billion in the year-ago period. Acquisition of Colgate meant that the company could add revenue of about $3.7 billion a quarter.
Johnson & Johnson (NYSE:JNJ) is one more firm that could explore the possibility of acquiring Colgate-Palmolive. The company’s market cap is significantly higher at $353.52 billion than Unilever and Procter & Gamble. The FMCG firm is also struggling for a strong growth and the acquisition could help boost its sales by about $15.2 billion a year. Colgate generated about $15.165 billion in the trailing four quarters.
According to a report in nypost.com, Colgate’s CEO indicated that he was open to selling the company on the back of sluggish demand for its food products, deodorants and toothpaste. According to the reports, the company expects an offer price of about $100 a share, which would mean close to 40 percent premium from the closing price of May 16.
At time of writing this, Colgate shares are trading up 3.28 percent in pre-market on Wednesday.