Energizer’s New Plan: Split the Company in Two
The company responsible for providing Energizer batteries, Schick razors and various hygiene products has announced its new plan to separate into two publicly traded companies. One company will focus on the household products we’ve come to rely upon, while the other company will concentrate efforts on personal care products.
Due to an increase in market competition and the growing popularity of rechargeable batteries, Energizer Holdings Inc. saw battery sales fall steadily over the past years. Meanwhile, its household product revenue dropped off by 25 percent since 2006. So now the company’s business strategy is aimed to help the two businesses focus more on commercial priorities and allocate resources more appropriately.
“We’re surprised by the decision to split the company, but think it makes sense,” BMO Capital Markets analyst Connie Maneaty stated. “The personal care segment may realize a higher valuation if it is not bound to the battery business.”
It’s a good example for what happens if a business spreads its resources across too many different areas. By consolidating these resources and choosing to split into two companies, the plan could actually increase the changes of future merger and acquisition opportunities.
Soon after the announcement, shares for Energizer Holdings Inc. shot up more than 17 percent in morning trading.
