The Cincinnatti-based consumer products conglomerate said it will recapitalize Duracell with about $1.8 billion in cash prior to handing over ownership of the business.
In exchange for the world's largest battery brand, P&G will receive Berkshire Hathaway's stake in the seller worth approximately $4.7 billion.
The transaction is expected to close in the second half of 2015.
The $3 billion valuation works out to be about 7 times the Ebitda Duracell is expected to generate in fiscal 2014, P&G said, which would be close to $430 million.
The household and personal care giant said the deal was structured to be "tax efficient."
P&G has been savvy in past years when it comes to minimizing taxes tied to culling its portfolio, with tax-free reverse Morris Trust spin-offs of Folgers coffee, Jif peanut butter and Crisco vegetable shortening and oil to Orville, Ohio-based jelly and jam maker J.M. Smucker Co. (SJM) in separate transactions, for example.
P&G also revealed on Thursday that it closed the sale of its interest in a battery joint venture based in China earlier in the week.
"We have the right strategic priorities, and we're making good progress against all elements," said A.G. Lafley, P&G's CEO, in a statement.
"We're clear-eyed about the challenges we face from external forces, like currencies. We will continue to accelerate and increase productivity savings, sharpen our strategies and strengthen our portfolio — all focused on delivering superior value to consumers and balanced growth and value creation for P&G shareowners," he said.
Industry sources have previously told The Deal that in addition to Duracell, the other large brand likely to be jettisoned by P&G is Braun, a name commonly associated with consumer and household electronics and appliances.
Likely acquirers for that business include Helen of Troy Ltd. (HELE) and Conair Corp., also makers of electronic appliances for the home, sources have said.
Ancillary laundry and soap brands that do not have the penetration of Procter & Gamble's flagship brands Tide, Pantene and Dawn are also said to be candidates, as well as the business of selling celebrity-branded perfumes.
Potential bidders have told The Deal that the consumer giant is running an unconventional auction process. Prospective suitors have to fill out applications, which include questions about the size of the business that they are most interested in bidding on and what they are willing to pay for it.
While private equity players are expected to be in the mix, don't count out strategic buyers, industry sources have said. Some of P&G's units will be difficult to separate out because they don't have their own infrastructure. As a result, whatever kind of entity buys them will need an existing infrastructure to support those brands.
Likely buyers may also include marketing and branding firms, which acquire the intellectual property or brand name and then license it out to manufacturers, collecting a royalty.
A Goldman, Sachs & Co. team including Alison Mass, Tim Ingrassia, Andre Kelleners, Andy Bowman and Steve Weiss provided financial advice to P&G.
A Jones Day team consisting of Bob Profusek, Peter Izanec, Tricia Eschbach-Hall, Tom Briggs and David Wales provided legal advice to the seller, while Cadwalader, Wickersham & Taft LLP's Linda Swartz provided P&G with tax counsel.
Berkshire Hathaway received legal advice from a Munger Tolles & Olson LLP team that included Mary Ann Todd, Robert Denham, Katherine Ku, Stephen Rose and David Goldman.