LONDON • Johnson & Johnson has said it will acquire personal care products firm Vogue International for US$3.3 billion (S$4.5 billion) in cash, a move that would expand its footprint in the hair care market.
With the acquisition, Johnson & Johnson will add brands such as OGX shampoos and FX hair-styling products to its consumer portfolio, which includes Neutrogena and Clean & Clear.
Vogue's hair care products have gained popularity, helped by colourful packaging that makes them stand out in drugstore aisles.
The privately held company has been focusing on increasing its presence in drugstores and is spending more on buying shelf space than on consumer advertising. Buyout firm The Carlyle Group acquired a 49 per cent stake in Vogue in 2014.
Mr Jorge Mesquita, Johnson & Johnson's worldwide chairman (consumer), said the deal for Vogue, which sells its products in the United States and 38 other countries, "will strengthen our global presence in this important category".
Johnson & Johnson had reported better-than-expected earnings last month, though segments such as its consumer unit did not perform as well as the pharmaceutical business, its largest.
The announced acquisition comes even as shareholders in Johnson & Johnson have been trying to press activist investors to take a stake in the company and push for a break-up, the Financial Times reported. The deal signals health in the US mergers and acquisitions market, which got off to a slow start earlier this year.
In the first quarter, Johnson & Johnson's consumer health sales fell 5.8 per cent to US$3.2 billion, largely because of Venezuela's devaluation of its currency, The Wall Street Journal reported.
The consumer business has been recovering from supply-chain problems that led to recalls. Executives have said they believe the unit has turned a corner and dismissed speculation that Johnson & Johnson would consider selling the business.
The announced acquisition comes even as shareholders in Johnson & Johnson have been trying to press activist investors to take a stake in the company and push for a break- up, the Financial Times reported.
The deal signals health in the US mergers and acquisitions market, which got off to a slow start earlier this year.
Unilever, Henkel & Co, L'Oreal and other companies had submitted first-round bids in an auction for Vogue, people familiar with the matter told Reuters last month.
The transaction, which is subject to regulatory clearance and slated to close in the third quarter, is not expected to have an impact on Johnson & Johnson's sales or earnings forecasts for this year.