The Dial Corporation today announced that it has reached an agreement to sell its Argentina business to an entity designated by Southern Cross Group, a private equity investor in Argentina. The transaction is structured as a sale of the assets of Dial Argentina, S.A., which includes the stock it holds of its two subsidiaries, Sulfargen, S.A. and The Dial Corporation San Juan, S.A. The sale is subject to satisfaction of negotiated closing conditions and receipt of approvals under Argentina's antitrust and bulk transfer laws. The sale is expected to close late in the first quarter or early in the second quarter of 2003.
The after-tax loss from this transaction in the fourth quarter currently is expected to be in the range of $50.0 to $60.0 million or $0.53 to $0.64 per share (diluted).
"Although our in-country business remained relatively strong, Argentina is not a good fit for us. Our business is primarily a North American business and Argentina has been a management distraction and challenge," said Herbert M. Baum, Dial's chairman, president and CEO.
Sales in Argentina, on a dollar basis, declined from $63.0 million in the first nine months of 2001 to $39.4 million in the same period in 2002, largely because of the devaluation of the peso.
The Dial Corporation entered the Argentina market in 1997 when it purchased personal care products maker Nuevo Federal, S.A. and several Procter & Gamble soap brands. The Company also purchased the Plusbelle hair care brand from Revlon in 2000. The sale is consistent with the strategy Baum announced shortly after his selection as CEO in 2000 to fix or jettison businesses that were not performing up to expectations.