Clorox-Bombril Deal Gets the Go-ahead

Clorox Co. said today it has resurrected its plan to form a household cleaning products joint venture with Brazil’s Bombril S.A., though at a lower price than previously announced.

Clorox will pay $175 million for its 50% stake in Clorox-Bombril S.A. This venture will provide Clorox with a significant interest in Brazil’s leading cleaning utensils and household cleaners business, Clorox said. Clorox has been looking to Latin America as an area to expand its business.

Clorox had said on January 24 it would pay $200 million for its share of the venture, then canceled the agreement on April 9, saying unspecified conditions for the transaction had not been completed. The transaction is subject to a delisting of Bombril S.A. from the Sao Paulo Stock Exchange and to the execution of a shareholders’ agreement that, among other things, will provide for Clorox’s role in the management of the new venture, Oakland-based Clorox said. The companies expect to finalize the transaction in July or August. Based on preliminary estimates, the transaction will modestly reduce Clorox’s fiscal 2002 earnings per share, Clorox said.