Consumer goods giant Henkel has agreed to divest its retailer brands business in North America to a New York-based affiliate of First Quality Enterprises, LLC, for an undisclosed sum.
The deal is subject to customary closing conditions, including regulatory approvals, the company noted.
Henkel's retailer brands business comprises products in the detergents, fabric finishers, and dishwashing categories catering to several retail customers in North America. The unit generates annual sales of around €500 million.
The Schwarzkopf maker identified the business as a non-core activity within the consumer brands business unit due to limited scope in terms of leveraging synergies and as a future strategic fit with the integrated consumer brands platform.
Wolfgang König, executive vice-president of consumer brands at Henkel, stated, “As we are sharpening our portfolio in North America, the world’s largest laundry and home care market, we underpin our ambition in this attractive market with our branded consumer business.
“With a more focused consumer brands portfolio, [...] we will further strengthen our ability via a focus on our branded portfolio to serve North American retail partners and consumers, drive a focused innovation pipeline, and fuel profitable growth through our iconic national brands in this important region.”
Portfolio Optimisation
The decision to divest the retailer brands business aligns with Henkel's plans for portfolio optimisation in the consumer brands business, announced in 2022.
It also marks the last major divestment in the portfolio optimisation measures as part of the merger of the formerly separated consumer businesses.
Including this transaction, Henkel has divested or discontinued brands and activities representing total sales of slightly over €1 billion since the beginning of 2022.
CEO of Henkel, Carsten Knobel, said, “Shaping a winning portfolio is a key element of our strategic agenda for purposeful growth. Our active portfolio management, either through acquisitions or divestments, is an important driver in making our business successful in the future.
“Fostering a strong and more focused portfolio has been a key rationale for the creation of our combined consumer brands platform, and over the past two years, we have delivered tangible results that underpin this strategic rationale.”
