Sara Lee abandons sale of insecticide businesses in EU to SC Johnson

Sara Lee Corp. announced Friday that the sale of its insecticides businesses to SC Johnson would exclude those businesses inside the European Union, due to competition concerns raised by the European Commission. Sara Lee proposes to divest the European component separately and to transfer the proceeds to SC Johnson.

Sara Lee said the parties had abandoned the transaction as originally notified and withdrawn the notification of the deal to the European Commission.

The deal between Sara Lee and SC Johnson was announced in June 2010. Sara Lee has already received nearly all of the purchase price of 153.5 million euros. The purchase price is not being altered and the proceeds from European divestitures would be transferred to SC Johnson. Sara Lee expects to complete the process of divesting the EU insecticides businesses in the second half of calendar year 2011.

The sale of Sara Lee's insecticides businesses in markets outside the European Union, such as Malaysia, Singapore, Kenya and Russia, would proceed to completion. SC Johnson is a family owned manufacturer of household cleaning products.

Sara Lee said it is looking at the possibility of transferring a limited amount of the European businesses to SC Johnson.

The deal was a part of Sara Lee's process of divesting its Household and Body Care businesses. The company has closed the sale of its stake in the Indian insecticides joint venture Godrej Sara Lee to Godrej for 185 million euros, its air care business to Procter & Gamble (PG) for 320 million euros, its body care and European detergents businesses to Unilever for 1.21 billion euros and its White King and Janola brands to Symex for 38 million euros.

Last week, Sara Lee reported a turn around to profit in third quarter. While announcing the results, the company had said the divestiture of its North American Fresh Bakery business is expected to close by the end of 2011. It also said it is evaluating strategic options for International Bakery and North American refrigerated dough businesses.

The company also lowered its fiscal 2011 forecast, expecting full-year 2011 earnings per share in the range of $0.67 to $0.71, compared to previous forecast of $0.75 to $0.79. Adjusted earnings per share from continuing operations are now expected to range from $0.79 to $0.83, compared to previous outlook of $0.85 to $0.89. Net sales for the full year would be $8.9 billion to $9 billion, compared to earlier estimate of $9 billion to $9.1 billion.

Analysts project earnings of $0.85 per share on sales of $8.89 billion.