Procter & Gamble Co (P&G) said it would sell its Duracell battery business, probably through a split-off into a separate company, as it looks to focus on faster-growing brands.
P&G shares rose about 3 percent as investors shrugged off a marginal fall in quarterly sales and warning that a stronger dollar would significantly hurt revenue and earnings this quarter. A surging U.S. currency, reduces the value of overseas sales when they are translated back into U.S. dollars.
P&G and Colgate-Palmolive Co, which on Friday reported a 17 percent drop in third-quarter profit and lowered its full-year earnings forecast, are the latest companies to be hurt by a stronger dollar.
Emerging markets generate about 50 percent of Colgate’s sales and about 39 percent of P&G’s revenue comes from developing markets.
The world’s No. 1 household products maker said in August it could sell about half of its slow-growing brands in the next two years. Duracell, the world’s No. 1 battery business, was widely considered to be one of the largest assets that P&G was likely to divest.
On a conference call, Chief Financial Officer John Moeller said the company had sold or discontinued 11 brands in the latest quarter and 25 in the last five quarters. Analysts expect it to sell laundry brands Fab and Trojan, Perma Sharp shaving blades and Fekkai hair products, among others.
Demand for Duracell’s mainstay non-rechargeable, disposable alkaline batteries has waned while a worldwide explosion in electronic devices has increased demand for re-chargeable batteries.
P&G, whose brands include Pampers diapers and Tide detergent, said it would first sell its interest in a China-based battery joint venture for an undisclosed amount and then exit Duracell completely.
The company said it was looking to split Duracell off into a stand-alone company but would consider alternatives that offer better value to shareholders.
Under the split-off, expected in the second half of 2015, P&G shareholders would be able to exchange some, none or all of their stock for shares of Duracell.