Market Overview

Procter & Gamble's Duracell Split Could Energize Earnings


Procter & Gamble Co's (NYSE: PG) plan to split off its Duracell battery brand could energize its earnings by reducing the number of shares outstanding, the company said Friday.

Procter & Gamble traded recently up 2.7 percent at $85.55 per share.

Procter & Gamble said it hasn't decided on a method to exit Duracell but said it currently prefers a split offering shareholders a chance to swap some or all of their holdings in the consumer giant for a stake in the newly formed company.

Procter & Gamble's outstanding share count would be reduced by the number of Procter & Gamble shares exchanged, with an exchange ratio set just before the transaction.

The company added that a spinoff, divestiture or other offer would also get consideration.

The Duracell split, expected in the second half of 2015, is part of a streamlining strategy the Cincinnati consumer giant announced in August designed to shed up to 100 mostly smaller brands and concentrate on its roughly 70 to 80 best sellers.

Duracell's annual sales are estimated at $2 billion and $2.5 billion, although Procter & Gamble, with total sales last year of about $83 billion, doesn't break out sales for the battery unit.

Procter & Gamble's intended Duracell exit was unveiled Friday along with its quarterly earnings release that met expectations on flat revenue.

An earlier step in the plan to dump Duracell was completed in August with an agreement to sell its interest in a China-based battery joint venture. Terms weren't disclosed.

Procter & Gamble recently completed the $2.9 billion sale of its Iams and Eukanuba pet food business to privately held Mars Inc. In September, Procter & Gamble agreed to sell its European pet business to Spectrum Brands.

Posted-In: DuracellEarnings News Asset Sales


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