P&G Shedding Businesses Is Part Of Long-term Plan

DAN SEWELL

CINCINNATI (AP) — The Procter & Gamble Co.'s $3.1 billion sale of its prescription drug business is in line with its recent strategy of shedding products to focus on areas with the best growth and profit-margin prospects.

The deal announced Monday with Warner Chilcott PLC will take away $2.3 billion in annual revenues, including the billion-dollar brand Actonel, an osteoporosis treatment. Last year, P&G sold another billion-dollar brand, Folgers coffee, to J.M. Smucker Co. for some $3 billion.

"We know that our shareholders don't reward us ... for absolute size; they reward us for growth," Bob McDonald, who became P&G's CEO on July 1, told analysts in a conference call. "And we are going to do what we have to do to get the right portfolio of businesses together."

P&G, the world's largest consumer products maker, reported Aug. 5 that its fourth-quarter profit fell 18 percent and sales 11 percent. Its revenue for the fiscal year that ended June 30 was $79 billion.

McDonald said Monday's deal will allow P&G to concentrate more resources on consumer health care, including over-the-counter medicines such as Vicks and Prilosec OTC, feminine care products such as Always, and oral care led by the Crest toothpaste brand.