Disposal

Unilever PLC
Unilever NV
31 October 2000

 

UNILEVER TO SELL ELIZABETH ARDEN TO FFI FRAGRANCES FOR $225 MILLION 
 
Unilever today announced it has signed a definitive agreement to sell its
Elizabeth Arden business, brands and certain assets to FFI Fragrances based
in Miami Lakes, Florida, USA, for a consideration of approximately $225
million (euro268 million approx). The transaction, subject to customary
conditions including regulatory approvals, is expected to be completed around
the year end.
 
As part of its Path to Growth Strategy, unveiled in February 2000, Unilever
announced it would re-organise or divest businesses that failed to meet its
strategic requirements. It identified specifically Elizabeth Arden and the
European Bakery Supplies Business (EBSB). Earlier this month Unilever
completed the sale of EBSB.
 
Included in the sale to FFI are the Elizabeth Arden fragrances, colour and
skin care brands and the White Shoulders brand. In addition, FFI will acquire
the licence to Elizabeth Taylor's White Diamonds and Passion fragrance
brands. The sale also includes related Elizabeth Arden offices and a
distribution facility. In total, some 1500 employees are expected to transfer
to FFI.
 
Unilever will retain its Prestige designer fragrance brands - Cerruti,
Lagerfeld, Chloe and Valentino - which will become part of its Unilever
Cosmetics International (UCI) business. UCI already manages Calvin Klein
Cosmetics, Nautica and the forthcoming Vera Wang and BCBG fragrance brands.
 
Charles Strauss, Unilever Board Director responsible for its global Prestige
business, said: 'Although Elizabeth Arden has improved over the last couple
of years, we feel that it can be best developed outside our business. This
move fits with our Path to Growth strategy by allowing us to focus on a core
group of designer fragrance brands.'
 
'By bringing these designer fragrance brands together within UCI we will
deliver faster product innovation and global brand development to build a
stronger Prestige fragrance business.'
 
Unilever will receive $190 million (euro226 million approx) in cash and the
balance in FFI convertible preferred stock. The FFI convertible preferred
stock has a face value of $50 million (euro60 million approx) to which
Unilever ascribes a value of approximately $35 million (euro42 million
approx).
 
Net assets being sold have a book value of $95 million (euro113 million
approx). The cash inflow, after tax, on disposal will be $160 million
(euro190 million approx).
 
When Unilever acquired Elizabeth Arden in 1989, the treatment of goodwill was
to charge it directly to reserves. As a result of changes in accounting
standards, it is now necessary for any goodwill associated with such an
acquisition to be charged in full to the profit and loss account on disposal.
 
Consequently there will be a reported loss after tax on disposal, taken as an
exceptional item, of $790 million (euro940 million approx) after including
the goodwill write back of $830 million (euro988 million approx). However,
the impact on the balance sheet will be to increase overall shareholder
equity by some $40 million (euro48 million approx).
 
These amounts, which will be included in Unilever's fourth quarter results,
fall within the restructuring charges of euro5 billion announced in February
as part of Unilever's Path to Growth Strategy.
 

Note to Editors:  
 
 
* The total 1999 sales of the business being disposed of was approximately
$550 million (euro655 million approx) and operating profit, after allocation
of overheads, $18 million (euro21 million approx).  
 
*  Brands involved in the sale to FFI Fragrances are:Elizabeth Arden, Red
Door, 5th Avenue, Green Tea, Splendor, Sunflowers and White Shoulders; the
skin care brands Ceramides, Millennium and Visible Difference and the
Elizabeth Arden cosmetics line. In addition, FFI will acquire the licence to
Elizabeth Taylor's White Diamonds and the Passion fragrance brands.
 
 
* FFI Fragrances (formerly French Fragrances, Inc) was established in 1992
and is based at Miami Lakes, Florida. It has a portfolio of some 230
fragrances and annual sales in excess of $360 million.