Sara Lee Corporation announced June 15 that it has received a binding offer from SC Johnson to acquire Sara Lee’s remaining insecticides business for €153.5 million. This announcement follows the completion of the sale of Sara Lee’s 51 percent stake in its Godrej Sara Lee joint venture in late May, which included its other insecticides business. Where permissible, Sara Lee has agreed to accept the binding offer upon satisfaction of certain conditions. In fiscal 2009, this business generated annual sales of approximately €82 million ($112 million based on fiscal 2009 exchange rates) and accounted for approximately six percent of the adjusted operating segment income for the International Household and Body Care business.
The proposed transaction, which is subject to customary closing conditions and regulatory clearances, is anticipated to close by the end of calendar 2010. Sara Lee will consult with relevant works councils during the process.
“The binding offer for our remaining insecticides business moves Sara Lee one step closer to focusing exclusively on our core food and beverage businesses, where we have strong competitive positions,” said Marcel Smits, interim chief executive officer, Sara Lee Corporation. “Receiving this offer from SC Johnson, one of the world's leading manufacturers of household products, showcases the value in Sara Lee’s International Household and Body Care portfolio.”
Sara Lee is executing a divestiture plan for its International Household and Body Care business which is designed to maximize value and minimize business disruption. The company continues to receive strong interest in the remainder of its household business, which includes shoe care and certain non-European cleaning brands.
The company has announced it has received binding offers from Unilever for its Body Care business for €1.275 billion and from P&G for its Air Care business for €320 million. In addition, Sara Lee has completed the sale of its stake in its Godrej Sara Lee joint venture to Godrej Consumer Products Ltd. for a total consideration of €185 million. To date, total announced Household & Body Care transactions are expected to generate pretax sales proceeds of approximately €1.934 billion, and represent approximately 81 percent of the fiscal 2009 adjusted operating segment income1 of the International Household and Body Care business. In February, Sara Lee hedged €1.6 billion at $1.35.
Sara Lee previously announced a revised capital plan that focuses on share repurchase, dividend pay-out and the funded status of the company’s pension plans, while maintaining a solid investment grade credit profile. The company plans to buy back $2.5 to $3 billion of shares over a three-year period, with approximately $1.0 to $1.3 billion of the shares anticipated to be repurchased in calendar year 2010. On March 2, 2010, the company announced that it had executed an accelerated share repurchase program under which it repurchased $500 million, or approximately 36 million shares, of common stock. Sara Lee expects to maintain and gradually increase its current $0.44 per share annual dividend and also anticipates making an additional $200 million cash contribution to its pension plans. The company continues to evaluate the best opportunities for value creation and investment of cash, including potential acquisitions or other investments in the company’s growth.
Sara Lee’s International Household and Body Care business generated approximately €1.5 billion ($2.0 billion) in sales in fiscal 2009.