Confirming that discussions on a possible acquisition of Hypermarcas'
personal hygiene business were at an advanced stage, Ontex cautioned
that neither side was legally bound to go ahead with a deal.
"There can be no assurance that a transaction will ultimately
materialize. Ontex will provide further updates in due course if
necessary," it said.
Earlier a person familiar with the transaction had said a sale was
set for about 1 billion reais ($300 million) in cash. A public
relations executive for São Paulo-based Hypermarcas had no immediate
Ontex shares were up 5 percent at 0930 GMT after it confirmed the
Last year, Hypermarcas hired advisers to look into a spin-off or an
outright sale of the unit, whose performance has suffered from lack
of scale and brand recognition, and soaring costs for raw materials
amid a sharp drop in the Brazilian currency.
Reuters reported in October last year that Hypermarcas had offered
the unit to Kimberly-Clark Corp <KMB.N>, Chile's Empresas CMPC SA <CAR.SN>,
Procter & Gamble Co <PG.N> and Svenska Cellulosa SCA AB <SCAb.ST>.
The deal, from which Hypermarcas was seeking 1.5 billion reais, was
halted a few months later amid price divergences and tax issues,
people familiar with the decision said in recent months.
Apart from consolidating Hypermarcas' exit from disposable goods,
the deal also marks Ontex's entry into Latin America's No. 1 economy
following the takeover of Mexico's Grupo P.I. Mabe SAB in March.
Founded in 1981, Ontex is moving into so-called growth markets to
counter feeble activity in Western Europe, the Middle East and
[to top of second column]
Shares of Hypermarcas have risen 15 percent this year, lagging a 33
percent jump in the benchmark Bovespa stock index. Part of that
reflects the impact of Brazil's harshest recession since the 1930s
and political turmoil on consumer goods and pharmaceutical firms
such as Hypermarcas.
Over the past couple of years, Chief Executive Officer Claudio
Bergamo has focused Hypermarcas solely on drugs, after the
diversified firm was likened to Unilever Plc <ULVR.L> just a few
Bergamo, with the blessing of controlling shareholder and Chairman
João Alves de Queiroz Filho, spearheaded a spree of two dozen
acquisitions in the drug, home-cleaning, beauty care and processed
food industries at the end of last decade.
Currently, Hypermarcas is one of Brazil's leading producers of
over-the-counter and generic drugs.
(Reporting by Guillermo Parra-Bernal; additional reporting by Philip
Blenkinsop in Brussels; Editing by Lisa Shumaker and Adrian Croft)
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