Hypermarcas acquires owner of Virilon and aims at Johnsons diapers
Valor Econômico
The plan of Hypermarcas to grow in the area of personal hygiene goes through the purchase of assets of Johnson & Johnson. Late last year, the companies began talking about the possibility of sale of the business of children's diapers to Hypermarcas, but the negotiations are on a stand-by since March. While that does not move on, Hypermarcas announces new acquisitions. Sunday night, the company confirmed the purchase of Luper Farmacêutica, owner of the brands Virilon and Gastrol. A memorandum of understanding had been signed by the companies in March, but the purchase agreement was executed on Sunday.
As regards J&J, legal issues, related to the brand of the American company, have ended up by interrupting the conversations. Valor found out that that discouraged the executives of Hypermarcas, who started evaluating other acquisitions in the past weeks. Questioned, both the companies have not made any announcements on the issue. Valor also found out that, even after the purchase of the diaper brands PomPom, last year, and Sapeka in March this year, Hypermarcas has not gave up on negotiating the purchase of assets of Johnson & Johnson in the area.
That because of the portfolio of the group, with more than R$ 2 billion (US$ 1.02 billion) in gross earnings last year, R$ 725 million (US$ 368 million) of which in beauty and personal hygiene. Data of the rival Kimberly-Clark shows that with the PomPom line, Hypermarcas has timid 3.5% of the market of children's diapers - against 35% of the segment of adult diapers. "If it is willing to fatten up its share a little more it will have to move on towards a major acquisition and, in that case, only Johnson & Johnson would accept negotiating", says a sector analyst who follows up on Hypermarcas. According to analysts of the sector, in case the parties fail to resume getting closer, J&J may miss a business opportunity that was important for its long-term strategy. J&J plans to little by little reduce their area of diapers in the businesses worldwide and focus on baby care products, such as lotions and creams.
Between September and October last year, both companies started discussing the possibility of transfer of assets of the five brands of diapers of Johnson & Johnson to the Brazilian manufacturer, but a legal issue hindered the process. "The problem is that the line of diapers of the American manufacturer has the Johnson & Johnson brand. With the sale, Hypermarcas would own a line of products with the name of a rival company in its portfolio", says a source close to the negotiations. "That is something the American manufacturer would never approve of", says the source. A solution would be the licensing of the trademark to the company and the sale of manufacturing structure of J&J, located in São José dos Campos, to the Brazilian manufacturer. That issue was examined by Hypermarcas and the conversations have not evolved since then.