Moody's: Colgate unchanged

Moody's Investors Service said that Colgate-Palmolive Co.'s proposed acquisition of Sanex from Unilever plc for about $940 million will likely not affect the company's Aa3/P-1 ratings and stable outlook.

Unilever was required to sell the Sanex brand by the European regulators as part of its pending acquisition of Sara Lee's personal care business, the agency said. Upon completion of the Sanex acquisition, Colgate has agreed to sell its detergent business in Colombia to Unilever for $215 million.

The transactions are expected to close in the second and third quarters, respectively, the agency added.

If completed, the combined transactions are consistent with the company's strategy to invest in higher-margin personal care categories while deemphasizing lower-margin brands, Moody's said.

Moody's said it expects the company to achieve meaningful cost synergies over time as it looks to maximize production capabilities and expand distribution beyond mass retail channels. The integration of Sanex with Colgate's existing Western European business should be relatively unchallenging.

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