P&G; to Buy Noxzema Maker for $1.3 Billion

Household and consumer products giant Procter & Gamble Co. claimed more space in the nation’s cosmetics cabinets today, announcing it is acquiring the maker of Noxzema skin care products in a $1.3-billion deal.

Noxell Corp., based in Hunt Valley, Md., makes and sells Cover Girl and Clarion cosmetics and Lestoil household cleaner. The 75-year-old company has 2,200 employees, had $522 million in sales last year and markets in the United States, Canada and Europe.

Procter & Gamble had worldwide sales of $21.4 billion last year, making it one of the world’s major consumer products companies. Its vast array of brands includes Cheer and Tide detergents, Charmin toilet paper, Crest detergent, Duncan Hines baking products, Folgers coffee and Pampers disposable diapers.

$33.15 Per Share

P&G; said it will exchange, on a tax-free basis, 0.272 shares of its common stock for each share of Noxell’s common and class B stock. Based on Thursday’s closing price of P&G; stock of $121.87 1/2, the transaction would have a value of about $33.15 per Noxell share, company officials said.

Noxell soared $9.75 a share to $31 in early over-the-counter trading today, while Procter & Gamble was down $2 at $119.87 1/2 a share on the New York Stock Exchange.

The transaction will be treated as a pooling of interests for accounting purposes, the two companies stated.

The merger is subject to approval by Noxell Corp.’s shareholders and federal regulators, led by the Federal Trade Commission. Directors of both Noxell and Procter & Gamble have unanimously approved the merger, the companies said.

Approval by Procter & Gamble shareholders is not required because the company has sufficient numbers of authorized stock shares not yet issued to provide the merger basis, P&G; spokesman William Dobson said today.

Procter & Gamble said it had obtained irrevocable proxies favoring the merger from Noxell shareholders controlling 6.5 million common shares, or about 85.6% of that company’s voting shares.

P&G; Gets Options

Those Noxell shareholders also granted P&G; options to acquire those shares, exercisable under certain circumstances that P&G; did not disclose.

There are about 40.5 million shares of Noxell stock outstanding, Dobson said.

P&G; Chairman John Smale and Noxell Chairman George Bunting Jr. said the merger offers promising growth opportunities for both companies.

The merger should be completed by year’s end, Dobson said. P&G; does not plan any immediate significant changes, although some employee relocations may become necessary, he said.