• Ad Age, Tuesday, October 2, 2007 10:30 AM

Three or four strategic buyers are believed to be the most likely buyers for the $1.1 billion business Unilever North American laundry business: Henkel, Church & Dwight, Vestar (majority owner of leading U.S. private-label detergent maker Huish) and Phoenix Brands, an orphan-brand consolidator that previously bought Colgate-Palmolive former laundry brands.

But the two biggest players could be put off by some of the same factors that make Unilever want to forgo the business in the first place--its relatively slow growth and the overwhelming scale and marketing-spending advantages enjoyed by Procter & Gamble. That leaves Huish and Phoenix, both of which would need to take on substantial debt to complete a deal. The tightening of the credit market could make that much harder.

All these factors could result in Unilever keeping the business, at least for the short term. And that could be good news for P&G. The other buyers--particularly Henkel--could realize significant efficiencies and get more aggressive in marketing or pricing, giving P&G a harder time than Unilever has.

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