P&G spokesman Tom Millikin said there will be no anticipated job loss as a result of the deal. Eighty-five percent of the employees will transfer to Warner Chilcott after the deal closes, with the remaining 15 percent of employees remaining P&G employees supporting the company’s personal health care division and other P&G businesses.
“We’re very pleased that the vast majority of the employees who will transfer to Warner Chilcott will likely continue to work in the communities they do today,” Millikin said. “Specifics on where precisely, or in what building the employees might work, those are details that will be clarified as the deal is closed over the next several months.”
P&G, the producer of Iams and Eukanuba pet foods, announced in May it would relocate its North American Pet Care Unity from Vandalia to Mason, a move expected to add 240 employees to its Mason-Montgomery Road facility. Millikin said that move is still scheduled to occur in October and is unaffected by the company’s deal with Warner Chilcott.
Warren County Economic Development Director Kimm Coyner said Warner Chilcott is looking into short-term space in an undisclosed location. She emphasized that gains made under the Iams move should work to offset to some degree any losses the Warner Chilcott deal might cause.
“We’re confident in our long-term relationship with Procter & Gamble and their continued investment in that facility,” Coyner said.
Mason City Manager Eric Hansen said possible tax revenue implications of the deal were unavailable, but city officials have always been pleased with the Mason Business Center and have been assured it continues to be an important strategic location for P&G.
“I think that’s evidenced by the relocation of their IAMS employees at the facility, which will certainly go a long way toward offsetting any immediate financial impact,” he said. “I don’t think it beholds a lack of success with Procter & Gamble or with the Mason Business Center. P&G is a growth company.”
Hansen said Mason works to grow jobs for the city but does not involve itself in P&G’s corporate strategy.
“What’s important to us is the facility and the investment that they’ve made in Mason,” he said. “I think they’ll continue to leverage that investment, whether it’s in pharmaceuticals, whether it’s in pet food, they’ll continue to use that to best success for the company, and that’s what we want.”
Cincinnati-based P&G, known for brands such as Tide detergent, Gillette razors and Pampers diapers, said late last year it was interested in exiting the prescription drug business. That segment’s products include women’s osteoporosis treatment Actonel, which generates more than $1 billion in annual revenue.
Ireland-based Warner Chilcott, which makes birth control, female hormone therapies and dermatology products, has forecast annual sales of just over $1 billion for this fiscal year.
In December, Procter & Gamble dialed back its drug division worldwide, but fewer than 50 Mason employees were let go. Millikin said at that time the employees learned of the decision to de-emphasize new drug investigations in September and the employees will leave the Mason offices.
P&G has said it sees better potential with over-the-counter products such as Vicks cough medicines and other personal care brands, like Always and Tampax feminine care. Last year, the company sold off its Folgers coffee business to J.M. Smucker Inc., and added beauty and grooming businesses to its portfolio.
Warner Chilcott says the business had $2.3 billion in revenue in the year ending June 2009, including more than a billion from Actonel. Warner Chilcott also gains colitis drug Asacol HD, bone drug Didronel and Enablex for overactive bladder in the deal.
The purchase expands Warner Chilcott’s business into 14 new countries, and also gives it the Procter & Gamble drug development pipeline and manufacturing plants in Germany and Puerto Rico. Most of the 2,300 workers at the drug business will transfer to Warner Chilcott.
Warner Chilcott said it will borrow funds from a group of banks to complete the deal, which is expected to close by year-end.
Procter & Gamble said the sale will result in a one-time gain of $1.4 billion, or about 44 cents per share. Lost profit from the business and other costs will cancel out 10 to 12 cents per share. The company expects the sale to lower its profit in future years by 16 to 18 cents per share.
The Associated Press contributed to this story.
About the Author
