Consumer products giant Unilever today said that it has made a binding offer to acquire the personal care business of the Sara Lee Corporation for $1.88 billion in cash to expand its portfolio in Western Europe and Asia.
The UK and the Netherlands listed company, which has brands like Dove, Vaseline, Axe and Comfort in its portfolio will be adding American consumer company, Sara Lee's skin cleansing and deodorant brands like Sanex, Radox and Duschdas.
With group 2008 revenue of nearly $13 billion, Illinois-based Sara Lee, generated annual sales of approximately $1.0 billion and accounted for approximately 55 per cent of the adjusted operating segment income for the International Household and Body Care business.
''The divestiture of body care and European detergents would advance our strategy to concentrate on our core food and beverage businesses where we enjoy a strong competitive position and where we can generate superior shareholder returns,'' said Brenda Barnes, chairman and chief executive officer, Sara Lee.
''We intend to use proceeds from the divestiture to invest for growth in our core businesses and to repurchase stock,'' she added.
Sara Lee said that its board has authorised a $1 billion share repurchase program and expects the deal to be completed next year.
For Unilever, this will be first major acquisition after its chief executive officer Paul Polman took over in January. He was a former executive at Nestle SA and Procter & Gamble Co.
Polman said, ''Personal Care is a strategic category and a key growth driver for Unilever. This transaction builds on our portfolio in Western Europe and also in Asia. The Sara Lee brands enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever's existing business.''
With 2008 revenue of nearly $60 billion, the acquisition will strengthen Unilever's leadership positions overall in Western Europe. In addition, there is significant potential for the company to build these brands in developing and emerging markets, which already generate approximately 15 per cent of their annual sales.