Wella snapped up by US giant

Wella snapped up by US giant

Wella, Germany's iconic cosmetics company, is being taken over by US giant Procter & Gamble after the controlling family decided to sell up.

Under the deal, P&G will pay the company's majority shareholders, the Schroeher family, approximately 3.2bn euros in exchange for more than three-quarters of the voting shares.

P&G will now move to buy the rest of the voting shares for about 5.4bn euros, a prospect that sent Wella's voting shares soaring by more than 20%.

But the company's management criticised the deal, which it said was "not a necessary step" in the light of "clearly defined growth targets" through till 2005.

It said the board was "further convinced it is able to implement the underlying strategy and to develop it further on its own".

Other suitors

There is little the board can do, however, and the likelihood now is that P&G will proceed rapidly to take the company over completely.

Shares in German consumer products rival Henkel also shot up - last week it bought 7% of Wella's stock.

The gain of 6%, after an early morning leap of 11%, was fed by relief that a potentially expensive deal battle would not now happen.

But in France, L'Oreal - at one point another potential suitor - found its shares falling back as much as 3% because of the prospect of competing head-on with P&G's marketing muscle.