Procter & Gamble is not going to purchase ladies’s magnificence merchandise startup Billie, as previously planned, following motion taken by the U.S. Federal Commerce Fee to cease the deal from continuing. In December, the FTC sued to block P&G’s acquisition of the New York-based startup Billie, a maker of ladies’s razors and different magnificence merchandise, on the grounds that the merger would get rid of competitors within the moist shave razor market.
Immediately, P&G and Billie issued a joint assertion, expressing their remorse over the Fee’s choice to aim to dam their merger, which led to the deal’s termination:
“We have been upset by the FTC’s choice and keep there was thrilling potential in combining Billie with P&G to higher serve extra shoppers around the globe. Nevertheless, after due consideration, now we have mutually agreed that it’s in each corporations’ finest pursuits to not have interaction in a protracted authorized problem, however as a substitute to terminate our settlement and refocus our sources on different enterprise priorities.”
Billie had made a reputation for itself within the ladies’s razor market by providing to get rid of the so-called “pink tax,” which refers to how ladies’s merchandise are sometimes marked up at larger worth factors in contrast with comparable merchandise aimed toward males. It later expanded into the broader magnificence market with a concentrate on extra pure merchandise which are freed from components and chemical substances, together with sulfates, parabens, formaldehydes, GMOs, drying alcohols, artificial dyes, fragrances, low-cost foaming brokers, unstable silicones and BHT.
The startup was additionally notably profitable in capturing the curiosity of a youthful, Gen Z to Millennial-aged shopper, who responded to its mission in addition to its trendy, and infrequently even progressive, advertising throughout social media and the online. In its commercials, Billie would show women with body hair — a message that went towards the grain of conventional societal expectations, the place ladies are sometimes proven in advertising messages — together with razor adverts — as already hairless and clean.
Billie’s message was that ladies ought to be at liberty to do what they need about their physique hair –however for many who desire to shave, it could be joyful to promote them an affordably priced razor.
What additionally made Billie attention-grabbing was its enterprise mannequin. The corporate presents to ship substitute blades on a subscription foundation to its prospects, which helped it develop revenues and buyer loyalty.
Forward of the P&G acquisition, Billie was planning to develop into bodily retail shops, which might have made the model a extra direct competitor to P&G merchandise, the FTC had stated.
“As its gross sales grew, Billie was prone to develop into brick-and-mortar shops, posing a severe menace to P&G,” famous Ian Conner, director of the FTC’s Bureau of Competitors, in a press release issued final month. “If P&G can snuff out Billie’s speedy aggressive progress, shoppers will seemingly face larger costs,” he added.
Because of the FTC’s actions, the businesses selected to place an finish to their plans to merge versus pursuing additional authorized motion.
The FTC praised this decision in a release issued today. Reuters additionally reported on the businesses’ choice to terminate.
“Procter & Gamble’s abandonment of the acquisition of Billie is nice information for shoppers who worth low costs, high quality, and innovation,” the FTC assertion reads. “Billie is a direct-to-consumer firm whose promoting targets prospects who’re bored with paying extra for comparable razors. The FTC voted to problem this merger as a result of it could have eradicated dynamic competitors from Billie.”
The FTC lawsuit was the second antitrust go well with the company filed in 2020 after it beforehand sued to dam Edgewell Private Care’s (maker of Schick razors) $1.37 billion deal to acquire the razor startup Harry’s, Inc., one other direct-to-consumer model. Consequently, that deal fell by means of, too.