Sara Lee may sell some brands to P&G
Procter & Gamble Co., the maker of Pampers diapers and Pantene shampoo, is in talks to buy part of Sara Lee Corp.'s international household products unit, according to people familiar with the discussions.
P&G is mainly interested in the division;s air-care business, which makes Ambi Pur air fresheners, said the people, who declined to be identified because the talks are private. Sara Lee prefers to find one buyer for the entire unit, which also includes insecticide and Kiwi shoe polish, they said.
Sara Lee is unloading units to focus on coffee and food, and agreed to sell body-care and European detergent units to Unilever for 1.28 billion euros ($1.9 billion) last month. Based on that multiple of 1.8 times sales, the air-care unit would be worth about $700 million.
"P&G has certainly prioritized growing its air-care business, so the addition of Sara Lee's business there would fit with that strategy," Ali Dibadj, a New York-based analyst with Sanford C. Bernstein & Co., said in an e-mail. He rates P&G shares "market perform."
Sara Lee, based in Downers Grove, said at the time the Unilever deal was announced that it has received "significant interest in the remainder of its household business and is continuing to pursue divestiture options."
Officials from P&G and Sara Lee declined to comment.
P&G, based in Cincinnati, advanced 10 cents to $57.59 at 11:54 a.m. in New York Stock Exchange composite trading. Sara Lee shares gained 5 cents to $11.51.
Air-Care Unit
The air-care unit accounted for about 20 percent of the household and body-care segment's sales, according to a 2008 Sara Lee presentation to analysts. Total sales for the segment in the year ended in June were $2.03 billion.
Sara Lee's Ambi Pur air products are sold in regions including Europe. P&G generates a lower percentage of its revenue outside the U.S. when compared with other international companies, said Jason Pride, director of research at Haverford Investments in Radnor, Pennsylvania. The firm oversees $6 billion and holds Procter & Gamble shares.
"It's something they need to do more work on," Pride said.
Other Buyers
Unilever is buying a Sara Lee unit that includes brands such as Sanex shower gel and Duschdas and Radox soap. It generated 750 million euros in sales in the year ended in June.
Sara Lee's units may also draw interest from companies including Godrej Consumer Products Ltd., India's second-biggest soap maker. Godrej said in August it may acquire some of Sara Lee's international businesses, including the U.S. company's stake in its Indian joint venture.
Calls made after regular business hours to the offices of Hoshedar Press, vice chairman of the Mumbai-based company, and P. Ganesh, vice president of finance, weren't answered.
The value of global consumer deals has risen to $76.3 billion in the past two months from $66.4 billion in the two months ended Aug. 22, according to data compiled by Bloomberg. Kraft Foods Inc., the world's second-largest food company, said on Sept. 7 it would pursue a takeover of Cadbury Plc after the Trident gum and Dairy Milk chocolate maker spurned its approach.