Procter & Gamble buys K-C baby wipes

Pulp & Paper, Jul 1996

Kimberly-Clark Corp. on May 23 said it will sell its baby wipes business to Procter & Gamble Co. for $220 million. The acquisition gives P&G a leading position in the $520-million U.S. baby wipes market where it had no previous presence. The sales includes three former Scott Paper Co. products-Baby Fresh, Wash-a-Bye Baby, and Kid Fresh-as well as the Dover, Del., manufacturing plant.

K-C said it expects to close the sale by the end of June. The three brands had combined revenues of about $130 million in 1995.

The sale was required as part of K-C's consent decree with the U.S. Justice Dept. following last December's $9.4-billion merger with Scott. Without the sale it had been estimated that K-C could have had more than a 55% market share of the baby wipes industry.The company will continue to manufacture its fastgrowing, market leader Huggies brand baby wipes at its plant in Maumelle,Ark.

In Canada, Scott Paper Ltd. will retain the right to use the Baby Fresh trademark until a separate agreement can be signed. Under the agreement with P&G, Kimberly will receive a royalty-free license to use the Baby Fresh trademark through 1998 in six European countries. In 1995, the brand had European sales of about $30 million. K-C said it plans to continue building the Baby Fresh brand in Europe while phasing in the Huggies brand.

P&G had been widely rumored to be the buyer of the baby wipes business and analysts noted it was willing to pay what is considered a premium to gain a foothold in the market. The sale pitches P&G head-to-head with K-C's Huggies brand in the virtually saturated U.S. baby