Acquisitions are an age-old strategy among global beauty conglomerates to fuel growth, but Procter & Gamble Co. isn't planning to rely on this tactic, according to Chief Executive Officer Jon Moeller.
During the company's investor day, as reported by Bloomberg, Moeller shared that higher financing costs and lofty expectations from sellers are some of the factors as to why P&G doesn't plan to lean "more aggressively" into transactions, expecting the majority of growth will be organic.
The caveat appears to be beauty and personal care, where P&G doesn't currently dominate the sector. Moeller said the company would consider "any kind of substantive" acquisition in the category.
In recent years P&G downsized its portfolio to about 65 brands in 10 categories from 170 in 16 categories in a strategy to focus on daily use categories in which consumers choose products based on effectiveness. In 2016, Coty scooped up 41 brands from P&G in a $12.5 billion deal.
Last spring P&G announced it had created a new Specialty Beauty Division following the acquisition of Tula Skincare, Farmacy Beauty, and Ouai haircare, indicating it was diving back into the prestige beauty pool. Moeller said any acquisitions would follow the same mandate of daily use and efficacy.
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