Gillette to divest teeth whitening business
Gillette Co.'s Oral-B Rembrandt teeth whitening line will be put up for sale to help gain US regulatory approval of Procter & Gamble Co.'s bid to buy the Boston shaving giant, according to a person briefed on the matter.
Gillette purchased the high-end Rembrandt business in April 2004 for about $300 million, but P&G's planned $57 billion takeover of Gillette would give the combined company excessive market share in the teeth whitening category.
Last month, P&G agreed to sell its battery-powered Crest SpinBrush to muster approval from European regulators. Now, the Cincinnati consumer products giant needs backing from the US Federal Trade Commission to complete the deal, which was approved last month by shareholders from both companies.
P&G spokeswoman Linda Ulrey said the company had already agreed to divest the Crest SpinBrush, but she could not comment on talks with the FTC about other possible divestitures. As the acquiring company, P&G is handling the discussions with regulators.
A Gillette spokesman declined to comment.
FTC spokesman Mitch Katz also declined to comment. The agency began examining the deal more than four months ago on antitrust grounds, such as whether the combined company would hold a dominant market position for any one line of products.
AG Edwards analyst Jason Gere said he was not surprised at the Rembrandt divestiture, given that P&G alone has at least two-thirds of the teeth whitening market with its Crest Whitestrips. Add Gillette's Rembrandt brand to the mix and the combined companies would dominate with about 85 percent of the teeth whitening market.
''That's monopolistic, even if it's a small niche category," Gere said.
Rembrandt had about $73 million in sales in 2003, Gere said, and he estimated last year's sales to be about $85 million. He said potential buyers for the brand would probably include private equity firms and Church and Dwight Co., which owns the Arm & Hammer oral care products.
Zvi Eiref, Church & Dwight's chief financial officer, declined to comment.
For P&G, divesting the Rembrandt line and the Crest SpinBrush are relatively small concessions considering the behemoth-sized deal that would create one of the world's largest consumer products companies. The deal would bring together P&G's Tide detergent and Pampers diapers, with Gillette's razors and blades, and Oral-B dental care products.
P&G and Gillette overlap in several product areas, including toothbrushes, whitening toothpastes, and deodorant. Analysts say excessive market share in deodorants may still present some troubles for the combined company, which would have about 50 percent of the market with P&G's Old Spice and Gillette's Right Guard lines, among others.
Pending regulatory approval, the deal is expected to close in the fall and result in 6,000 layoffs from a combined workforce of 140,000.
Jenn Abelson can be reached at abelson@globe.com. 
