Gillette Ordered to Sell Stake in Wilkinson Parent
BOSTON (AP) _ Gillette Co., which was blocked from buying the U.S. business of rival Wilkinson Sword, was ordered Wednesday to sell its minority interest in Wilkinson’s Dutch parent company.
The European Community Commission concluded Gillette’s relationship with Eemland Holdings NV would hurt competition on the continent. The commission said its investigation found Gillette violated EC competition rules by having influence over Eemland’s commercial policy and distorting the razor market.
″The link between Gillette and Eemland will weaken competition,″ the commission said in a statement. ″Consequently, Gillette’s involvement in the overall arrangement is an abuse of its dominant position.″
Gillette spokesman David Fausch said the Boston-based company, the world leader in the razor market, had not seen the EC commission orders and had not decided whether to appeal them.
But Fausch insisted Gillette’s relationship with Eemland did not affect competition in the European market, saying ″in fact they are a very strong competitor in Europe.″
Fausch also said Eemland is trying to sell Wilkinson, and ″if that sale goes through, it makes this academic.″
In a 1989 deal, Gillette helped finance a buyout of Wilkinson’s Swedish owner and gained a 22.9 percent, nonvoting interest in the newly created company, Eemland.
The $155 million deal would have given Gillette the Wilkinson blade and razor business outside Europe. But the U.S. Justice Department blocked Gillette from acquiring the Wilkinson business in the United States in 1990, saying it was acting to promote competition.
The European commission set an unspecified deadline for Gillette to dispose of its interest in Eemland. Gillette is also required to return to Eemland control of the Wilkinson Sword businesses in some European markets, including the former East Germany, Czechoslovakia, Hungary, Poland, Turkey, and the former Yugoslavia.
The investigation was sparked by complaints from competitors that Gillette was unfairly cornering the market.
Because of its position as a stakeholder and major creditor of Eemland, ″Gillette will be able to exercise some influence over the commercial policy of Eemland,″ a commission statement said.
The two companies were also tied by arrangements for Eemland to supply Gillette with Wilkinson Sword products for sale outside the EC.
But Fausch said Gillette never intended to have a long-term investment in Eemland. Gillette officials have said the company’s main interest is in Wilkinson’s business in other parts of the world.