Energizer Shaving P&G's Share

Energizer Holdings (ENR - Analyst Report), which ranks second after Procter & Gamble (PG - Analyst Report) in men’s shave products, in June acquired the Edge and Skintimate shave preparation business from Johnson & Johnson (JNJ - Analyst Report) for an aggregate purchase price of $275 million. Through the acquisition, ENR will be adding shaving creams and gels to its Schick-Wilkinson Sword razor business.

P&G is leader in the U.S. market for men's pre-shave products such as creams and gels, with a 39.2% share, followed by Edge with a 21.5% market share, according to Euromonitor International. In women's pre-shave products, Skintimate leads the market with a 65.7% share, followed by a 25.6% share of Gillette Satin Care, according to Euromonitor. Therefore, we believe the acquisition to be a strategic fit to the existing portfolio of ENR, enabling ENR to compete better with P&G.

The global shaving products business is comprised of wet shave blades and razors, electric shavers, lotions and creams. The wet shave segment of Energizer is composed of the razor systems and disposable products categories. Geographically, North America, Western Europe and Japan represent developed markets with stable and predictable demographic trends in the number of shaving consumers.These markets are expected to rely primarily on new premium-priced product introductions for growth.

Demographic trends are expected to strongly influence wet shave demand patterns in Latin American, Asian and Eastern European countries. Further, the demand for better shaving experience among men and growth in the specific variants of razors for women has led to tremendous technological advancements in the shaving products market for both sexes. Therefore, it is noted that the shaving products market, which includes preparations, is booming.

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