Colgate to Sell Its Household Bleach Business in Latin America and Canada

2006-12-20 | 08:25

As part of its ongoing strategy to increase global focus on the more profitable oral and personal care businesses, Colgate-Palmolive Company announced its agreement to sell its Latin American and Canadian bleach brands to The Clorox Company for $126 million plus inventory at cost at closing. The transaction includes the sale of the bleach brands Javex, Agua Jane and Nevex in Canada, Uruguay and Venezuela, respectively, and the license of the Ajax brand for bleach during a transition period in Colombia, the Dominican Republic and Ecuador. Reuben Mark, Colgate's chairman and chief executive officer said, "As with the sale of our detergent businesses, this move divests a non-core business in favor of our oral and personal care businesses, which have more than double the rate of sales and profit growth in the countries affected." The sale is subject to regulatory and other customary approvals in Colombia. The transaction is expected to close in Canada during fourth quarter 2006. In the Latin American countries, the transaction is expected to close during first quarter 2007, although the sale of the Colombian business will be subject to regulatory approval. It is estimated that these bleach business sales will result in a cumulative after tax gain of approximately $70 million and will be fully offset by previously disclosed restructuring charges under the Company's 2004 Restructuring Program in all periods. Mr. Mark concluded, "This simplification of our portfolio will improve gross profit margins in our Latin American and North American divisions and should facilitate the stronger growth of our highly profitable oral and personal care businesses."