Procter & Gamble / Wella

MEXICO, 2003

Procter & Gamble Company (Procter) notified the acquisition of stocks from Wella, AG (Wella) derived from an international operation that ha dalready been notified to the competition authorities of the US and the European Union. The following relevant markets were defined: hair shampoo, hair conditioners, hair stylers and hair tints, fragrances, and cosmetics. Although there is a wide variety of products that may be used for the same purposes, a significant price difference across segments was found.

This lead the FCC to analyze the merger under two scenarios: a) generic markets for shampoo, conditioners, hair stylers, tints and fragrances and b) segmented markets based on prices. The geographic dimension of the relevant markets was defined as national since: i) products are distributed with a national criteria; ii) retailers buy the relevant products within Mexican frontiers and iii) imports comprised recognised trademarks and are distributed through well-established channels throughout the country.

Under these two scenarios, the merger between Procter and Wella in Mexico did not exceed the concentration index, except for the low price tints segment. However, firms like L�real and Revlon, tints productors, can easily enter this segment. Based on the analysis, the FCC resolved to authorize the merger.