Clorox to Acquire 50% of Brazil's Premier Household Products Business
Clorox will pay, under terms of the agreement, $200 million to acquire a 50% stake in Detergentes Bombril S.A., a new venture to be formed by Bombril S.A. and Clorox, as well as other rights.
Bombril will transfer assets to the joint venture such as trademarks, three production facilities and approximately 1,900 employees. Bombril S.A., was founded more than 50 years ago, and in calendar year 2000 had net customer sales of about $205 million.
Bombril holds a No. 1 market position in cleaning utensils in Brazil, with its Bom Bril brand of steel wool. With Pinho Bril and other brands, Bombril also holds the No. 1 position in disinfectant cleaners. Additionally, the Bombril portfolio includes other household cleaners, fabric softeners and dishwashing liquid, and Bombril has one of the most extensive distribution networks in Brazil.
The transaction is subject to different closing conditions, such as confirmatory due diligence and execution of a shareholders' agreement that, among other things, will provide for Clorox's role in the management of the joint venture. The companies are slated to finalize the transaction in May 2001.
The transaction would have a positive impact on Clorox’s fiscal 2001 cash earnings while diluting earnings per share by about one cent - based on preliminary estimates.
In March 2000, Clorox acquired Bon Bril cleaning utensils in Colombia, Venezuela and Peru. Due to this, Clorox will have rights to the Bom Bril and Bon Bril brand names throughout most of South America and will be the cleaning utensils category leader in the region. Clorox also manufactures and markets Clorox bleach, X-14 cleaners and SBP insecticides in Brazil.