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Duracell

P&G to hive off Duracell as consumers turn to rechargeable devices

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By Noel Young, Correspondent

October 23, 2014 | 3 min read

Procter & Gamble is hiving off its battery business. The company plans to turn the leading battery brand Duracell, with $2 billion in global sales, into a separate firm.

Duracell: Battery sales dim

The move comes after Energizer Holdings in April announced plans to make a separate business around its Energizer battery business.

The two companies hope casting off batteries can free up resources for more promising parts of their businesses, said the Wall Street Journal.

The problem: Since electronic devices began relying mainly on rechargeable power sources, batteries have had a tough time.

Total battery sales fell 4.3% to $2.2 billion in the U.S. for the 52 weeks that ended Sept. 27.

P&G has been shedding brands in hopes it can speed up sales growth by focusing more closely on the products and markets that matter most.

The company has dumped 25 brands over the past five quarters, including 11 in its most recent period, and could dispose of as many as 100.

The plan to offload Duracell came as P&G reported flat sales of $20.8 billion and a 34% drop in profit to $2 billion for its fiscal first quarter.

Shareholders may given the option of exchanging P&G stock for a stake in the newly formed company. The split will be complete in the second half of next year. Another option for Duracell: its high margins may attract bids from private-equity firms.

P&G’s sales rose 2%, helped by higher prices.P&G cut its sales forecast for the year, saying the stronger dollar would have a significant negative impact in the last three months of the year.

Analysts and investors have long pushed for P&G to sell Duracell,said the WSJ. The battery brand came to P&G with the company’s $57 billion purchase of Gillette in 2005

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