Colgate to buy Swiss maker
CHICAGO (Reuters) -- Colgate-Palmolive Co. says it has agreed to buy privately held Swiss toothpaste maker GABA Holding AG for up to $830 million, expanding its reach in Europe in a rare acquisition for the world's leading toothpaste seller.
Colgate said Thursday it will pay from $630 million to $830 million in cash for GABA.
The deal is expected to cut Colgate's 2004 earnings by 3 percent, leave them unchanged in 2005 and boost earnings in 2006, Colgate said.
The last notable acquisition for Colgate was in 1995, when the company acquired the Kolynos toothpaste business in Latin America, a spokeswoman for the company said. Colgate's strategy over the last several years has been to try to increase its business internally.
"That acquisition in the mid-90s did strengthen their Latin America business," Joseph Altobello, analyst at CIBC World Markets, said. "This could strengthen their European business."
Altobello, who rates New York-based Colgate "sector-performer," also said the acquisition could help Colgate against arch rival Procter & Gamble Co., maker of Crest toothpaste, which has been improving its European business.
Colgate also said Thursday that it expected fourth-quarter and full-year earnings to be within the range of analysts estimates. Analysts on average forecast a fourth-quarter profit of 64 cents a share and a full-year profit of $2.45 a share, according to Reuters Research.
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