Anglo-Dutch consumer products group Unilever will sell its North American detergents business, including the All and Wisk brands, for $1.45 billion in cash and stock to private equity firm Vestar Capital Partners.

Vestar will pay $1.08 billion in cash and $375 million in shares in a new venture to be set up, Unilever said in a statement. Vestar will merge the business with its Huish Detergents Inc and form a new unit called Sun Products Corporation.

Under the deal Unilever will sell the Surf, Snuggle, Wisk and Sunlight fabric cleaning and conditioning brands in the US, Canada and Puerto Rico, as well as Unilever's manufacturing facility in Baltimore, US.

Vestar will merge the business with its existing operation, Huish Detergents, to form a new company, The Sun Products Corporation. The new company will move to No 2 from third in the North American market and gain scale needed to compete against Tide-maker P&G.

Unilever, the world's second-biggest consumer-products company, said it will instead focus on faster-growing businesses. But said it will continue to sell detergents outside North America.

Unilever's North American detergents business generated $1 billion of revenue last year. Last week, the company agreed to sell its Bertolli oil and vinegar businesses to  olive-oil maker Sos Cuetara SA for 630 million euros.

Last year, Unilever had announced plans to sell businesses with over $3.14 billion (over €2 billion) in combined sales and has so far sold assets worth about three-fourths of the disposal target.

Unilever chief executive Patrick Cescau has so far announced 19 divestments since he took over in 2005, in a bid to drive sagging sales. Unilever, which had cut jobs to reduce costs, is moving some research and development work to India and China.
 
The deal, which is subject to regulatory review, is expected to be closed in a couple of months, Vestar said in a press release.

Vestar, which has $7 billion under management and focuses on companies in the US, Europe and Japan, has made 65 buy-outs of a total value of more than $20 billion since it was founded in 1988.

Morgan Stanley and Cravath Swaine & Moore LLP are advising Unilever. JPMorgan Chase & Co. and Lehman Brothers Holdings Inc. are advising Vestar. The banks together with GE Capital Markets also arranged the financing for the acquisition.

Unilever, meanwhile, is looking for a successor to its current CEO Patric Cescau.  While the company is open to recruiting outsiders, internal candidates likely chief financial officer Jim Lawrence; Harish Manwani, who runs Unilever's business in Asia, Africa, and central and eastern Europe; and Vindi Banga, the Indian-born president of its foods, home and personal care business.

Unilever, which is a distant No 2 behind rival Procter and Gamble, recorded pre-tax profits of $7.74 billion (£3.87 billion) last year, up 11 per cent.