Unilever rids Molson of Diversey business

Source: ECN


UNILEVER IS to buy Diversey, the Molson speciality chemicals division, for Can$780m ($582m) in a move that represents Unilever's largest takeover in 15 years. Unilever says that the buy will complement its existing industrial and institutional cleaning products.

Toronto-based Diversey enjoyed profits of $51.4m on sales of $766m in 1994 and is particularly strong in the North American market. Unilever's sales in the US are now set to double to around $453m while sales in Europe could rise to $906m from $528m in 1994.

The major cause of Molson's anxiety to get rid of Diversey has been the growing operating loss of its US branch, which reached $11m in Q3 1995 (on sales of $116m). Molson responded by slashing 500 jobs, saving $25m/year on paper. The problem apparently began with Molson's 1991 takeover of US cleaning products company DuBois Chemicals. The amalgamation of the two firms is said to have resulted in weaker service and slower deliveries.