Chesebrough-Pond’s to Buy Maker of Obsession
Between love and madness, apparently, lies a merger.
Minnetonka Corp., a Minnesota-based maker of cosmetics and fragrances such as Calvin Klein’s Obsession, said Sunday that it is being sold in a two-part deal for $376.2 million, or $22.86 per share.
In the first part of the deal, Minnetonka’s fragrance marketing group--which sells such brands as Vitabath, Claire Burke and La Costa Spa--and its medical products divisions will be sold to Tsumura International Inc. for about $70 million.
Tsumura is a subsidiary of Tsumura & Co. of Tokyo, Japan’s market leader in the fields of bath additives and prescription herbal medicines, with annual sales of more than $700 million. Tsumura also will acquire the rights to the Minnetonka name.
The remainder of Minnetonka then will be purchased by Chesebrough-Pond’s Inc. for about $306 million. Chesebrough-Pond’s is part of the Anglo-Dutch Unilever Group, one of the world’s largest manufacturers of consumer products, with sales of $31 billion in 1988. Its U.S. operations already own such fragrances as Elizabeth Taylor’s Passion, Cerruti and White Shoulders.
When the deal is completed, Chesebrough-Pond’s will own Minnetonka’s most valuable asset, Calvin Klein Cosmetics Corp., which markets handbags and leather accessories under the designer’s name, as well as the fragrances Obsession, Obsession For Men, Eternity and Calvin. Obsession has become known for its highly stylized television commercials featuring the breathy tag line, “Between love and madness lies obsession.”
According to the company, Calvin Klein Cosmetics had sales of $158 million in 1988, 82% of which was in the United States.
Minnetonka first put itself up for sale in March, with the intention of “maximizing value to our stockholders,” according to Chairman Robert R. Taylor. At the time, analysts said the company could be worth as much as $465 million, or $22 to $25 a share. Minnetonka stock closed at $25 per share in over-the-counter trading Friday.
According to Sol Mester, a cosmetics consultant and former president of both Max Factor and Redken Laboratories, the deal “is part of a trend toward tremendous consolidation in cosmetics field over the last few years.”
“Revlon bought Max Factor in 1986 and Japanese companies have been buying heavily into cosmetics and personal care products in the United States,” he said.
In 1988, Tokyo-based Shiseido acquired Zotos International Inc., a Connecticut-based cosmetic supply company; another Japanese company, Sunstar Inc., bought John O. Butler Co., a Chicago-based maker of toothbrushes. Avon Products Inc. recently rejected a $2.1-billion buyout bid from Amway Corp. and a merger proposition from its chief rival, Mary Kay Cosmetics Inc.
