NEW YORK (
( SLE) stock is climbing midday Wednesday after EU regulators approved the purchase of its international toiletries assets by global consumer goods conglomerate
Shares of Sara Lee are up 2.6% to $15.29, while Unilever American depositary receipts are up 1.1% to $29.61
The European Commission said on Wednesday that it would allow the sale to occur, but only after Unilever made some concessions, including selling Sara Lee's Sanex bath, shower and deodorant brand in Europe. The move alleviated the regulating body's concerns about a monopoly-like dominance by Unilever in the European personal care market.
Regulators had been worried about unfair price increases for consumers and unfair competition in Belgium, the Netherlands, Denmark, the U.K., Ireland, Spain and Portugal with combination of Sara Lee's Sanex brand and competing Unilever brands such as Dove and Rexona.
Sara Lee said the expected divestiture of Sanex, would lower Unilever's offer for Sara Lee's global Body Care and European detergents businesses to 1.21 billion euros, or about $1.63 billion, from 1.275 billion euros. Sara Lee expects the deal to close in December and says the lower proceeds won't slow down its plans to repurchase $2.5 billion to $3 billion of shares by the end of fiscal 2012.
The sale of Sara Lee's global Body Care and European detergents businesses, which include well-known international brands such as Sanex, Radox and Duschdas, was announced on Sept. 25 last year. Together, the portfolio generated more than 750 million euros in sales for the year ended June 2009, according to Unilever. Sanex accounted for 168 million euros of the total amount.
Prior to this Sara Lee deal, it's been almost a decade since Unilever acquired any major businesses, and its purchase of the Sara Lee portfolio of more than 90 brands in 19 European countries will certainly assist with its international expansion plans and in facilitating the seller's goal of focusing on its core food and beverages businesses.
To date, Sara Lee has closed the sale of its air-care business to
Procter & Gamble
for 320 million euros and stake in the Indian insecticides joint venture Godrej Sara Lee to Godrej for 185 million euros. Sara Lee expects the sale of its non-Indian insecticides business to
for 153.5 million euros to close by the end of calendar year 2010.
-- Written by Andrea Tse in New York.
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