Report: P&G to buy Sara Lee's air unit for $472 million

Procter & Gamble Co. is buying Sara Lee Inc.'s Ambi Pur air freshener business for $320 million euros, or $470 million.

The deal adds strength for consumer-products giant P&G in Europe and will complement its Febreze line of deodorizers.

Sara Lee of Downers Grove said it is selling the unit because it wants to focus on its main business as a food maker. Sara Lee said the air-freshener business generated annual sales of $355 million in fiscal 2009.

"The proposed sale of our air care business is the next step in our plan to focus on our core food and beverage businesses, where we have a strong competitive position and can generate superior shareholder returns," said Brenda C. Barnes, CEO of Sara Lee.

P&G expects the purchase to boost its market presence with products like car air fresheners.

Since P&G bought the Gillette Co. for $57 billion in 2005, P&G has focused on snapping up small businesses. Within the past two years, P&G also sold off its prescription drug business, Folgers coffee, and several smaller brands.

The deal is expected to close in fiscal 2010, the companies said.

Shares of P&G, which is based in Cincinnati, rose 38 cents to $62.62, and shares of Sara Lee advanced 4 cents to $12.23 in morning trading.

Sara Lee has been shedding units to focus on coffee and food. The company said in March it was considering selling the household and body-care brands. Unilever NV agreed in September to buy the body-care and European detergent unit for $1.88 billion.

P&G gets most of its $79 billion in annual revenue from household items such as Pampers diapers, Ivory soap and Tide laundry detergent. It agreed to sell its prescription-drug unit to Warner Chilcott Ltd. for $3.1 billion in August. The Cincinnati-based company said it would use the proceeds to develop new products and make acquisitions.