Procter & Gamble Co. is buying Sara Lee Inc.'s Ambi Pur air freshener business for $320 million euros, or $470 million.
The deal adds strength for consumer-products giant P&G in Europe and will complement its Febreze line of deodorizers, which is sold mainly in the North America.
Sara Lee of Downers Grove, Ill. is selling the unit to focus on its main business as a food maker. Sara Lee said the air-freshener business generated annual sales of $355 million in fiscal 2009.
"The proposed sale of our air care business is the next step in our plan to focus on our core food and beverage businesses, where we have a strong competitive position and can generate superior shareholder returns," said Brenda C. Barnes, CEO of Sara Lee.
Analysts see the deal as a smart move for the food maker, which has lagged behind some of its competitors _ in part because of a broad product lineup that some say has kept it from leading in any one area. Several analysts said it is an attractive deal.
Tim Ramey, analyst for D.A. Davidson, said the only remaining hurdle is if Sara Lee is able to sell the remaining part of its household business, which includes insecticide and shoe polish, at the same level of value.
P&G has sold snapped up a number of small businesses since its purchase of the Gillette Co. in 2005 for $57 million. Company leaders say it remains interested in acquisitions big and small.
The company, which makes products like Tide detergents and Pampers diapers, has also sold off its prescription drug business, Folgers coffee, and several smaller brands within the past two years.
With this latest acquisition, P&G expects the purchase to boost its market presence globally and take on complementary products like car air fresheners.
The deal is expected to close in fiscal 2010, the companies said.
Shares of P&G, which is based in Cincinnati, rose 10 cents to $62.34, and shares of Sara Lee advanced 2 cents to $12.21.