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NEW YORK/CHICAGO - Energizer Holdings Inc. said on Tuesday it would buy Schick-Wilkinson Sword, the world's No. 2 shaving brand, from Pfizer Inc. for $930 million in cash. The deal helps Energizer diversify itself from the sluggish battery market.
Schick, which ranks a distant second behind Gillette Co. in the shaving business, would become Energizer's first significant foray outside the battery business. Gillette, with its Duracell brand, is also No. 1 to Energizer's No. 2 in that market.
The two businesses complement each other with similar distribution channels, which include food, drugstore, mass merchant and convenience stores as well as other outlets, analysts told Reuters news service.
"I think it gives them diversification in an adjacent category, which on a long-term basis is a good thing," Ann Gillin Lefever, consumer products analyst at Lehman Brothers, said.
Schick, with 18 percent of the global wet shaving market, compared with about 70 percent for Gillette, was acquired by Pfizer in 2000, when it bought pharmaceuticals company Warner-Lambert. The brand had languished in recent years as both companies focused on their drug businesses.
"The opportunity really is around picking up a product that has not been core to Pfizer, and Warner-Lambert ahead of it, and to be able to improve revenue and profitability," Lefever said.
The deal, which is subject to regulatory approval, is expected to close in the first half of 2003.
Schick-Wilkinson Sword, based in Milford, Conn., had 2002 sales of about $650 million and sells under brand names like Xtreme3 razors and Silk Effects. Under the Wilkinson Sword name, the business also manufactures a line of ceremonial swords.