P&G to acquire Tambrands

CINCINNATI Procter & Gamble Co. is buying Tampax maker TambrandsInc. for $1.85 billion, giving P&G control of the market leader inthe tampon industry.

P&G, which makes Always sanitary pads, plans to use itsworldwide marketing might to open up new markets for Tampax,Tambrands' only product.

"This acquisition provides a unique opportunity for P&G to enterthe tampon category with an established brand," P&G Chairman andChief Executive John E. Pepper said. "Tampax helps us reachconsumers around the world who prefer tampons."Pepper said the company would look to increase Tampax sales inmore countries, noting that Latin America and Asia account for lessthan 5 percent of the brand's volume. P&G also wants to increase theU.S. market by developing new feminine hygiene products.P&G's Always brand is the top sanitary pad in the United Statesand adding Tampax would put it further ahead of rivals like Kotexmaker Kimberly-Clark Corp.The $1.85 billion deal for Tambrands is the biggest acquisitionever for Procter & Gamble, the Cincinnati-based consumer productscompany with $35 billion in yearly sales worldwide. P&G said it willpay $50 in cash for each Tambrands share.Rumors of the buyout had sent Tambrands' shares and optionsjumping during the past few trading days.Tambrands, based in White Plains, N.Y., will no longer exist asan independent company after about 60 years in business."P&G is the ideal partner for Tambrands," said Edward T.Fogarty, Tambrands chairman and chief executive. "Becoming part ofP&G . . . will accelerate the global growth of Tampax and enable thebrand to achieve its full potential."P&G already dominates the feminine sanitary protection industry,with its Always sanitary pads leading the $1.1 billion U.S. marketwith a 36 percent market share.P&G does not sell tampons, a market Tambrands dominates. Thecompany has a 45 percent share of the international market and almost50 percent of the U.S. market.P&G took its Rely tampon off the market in 1980 after it wasassociated with toxic-shock syndrome.P&G had revenue of $35.3 billion for the fiscal year that endedJune 30.In September, Tambrands announced it was cutting 600 jobs andclosing plants in Russia, Ireland, France and Vermont in an effort tobecome more efficient.