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Kodak OKs Auctioning of Its Household Products Unit : Reorganization: Sale to Britain's Reckitt will raise $1.55 billion for company refocusing on core imaging business.

September 27, 1994|From Associated Press

NEW YORK — Eastman Kodak Co. moved closer to selling the rest of its non-photographic businesses on Monday, agreeing to auction the company's household products unit to Britain's Reckitt & Colman for $1.55 billion in cash.

The subsidiary, part of Kodak's L&F Products unit, includes such familiar brands such as Lysol cleaners, Mop & Glo floor polish, Resolve carpet cleaner and Wet Ones moist towelettes.

Reckitt, itself a major household products company in the United States and Britain, produces Easy Off oven cleaner, French's mustard, Woolite clothes detergent and Air Wick air fresheners.

The sale is part of a reorganization Kodak announced in May when it put its health care and consumer products businesses up for sale.

Those units were acquired in an ill-fated attempt at diversification in the 1980s that has left Kodak plagued with high debt and several years of weak profits.

As a result, the firm is refocusing on its main businesses of photography and electronic imaging.

"This transaction takes us much closer to our strategic goal of total dedication and resource commitment to our core imaging businesses," said Kodak Chairman and Chief Executive George Fisher, in a statement echoing comments he has made after similar deals were announced this summer.

For Reckitt, the purchase allows a major expansion into the United States and makes the company one of the world's leading household products makers.

The business it's buying, known as L&F Household, had $775 million in revenue last year and about $119 million in profits from operations, before taxes. It is based in Montvale, N.J., and has operations in Canada, Germany, Australia and Southeast Asia, with about 2,400 employees.

Reckitt expressed interest in the business bought shortly after Kodak announced the divestiture program, said Charles Smith, a Kodak spokesman.

It bested several other companies in a sealed-bid auction.

Like previous deals the price was at the high end of analysts expectations. It brings the total of Kodak's sales this year to $7.17 billion.

In June, Kodak sold the prescription drug business of its Sterling Winthrop division to French pharmaceutical company Elf Sanofi for $1.68 billion.

In August, it sold Sterling's non-prescription business including Bayer Aspirin, to Britain's SmithKline Beecham for $2.9 billion. SmithKline later sold the North American portion of that business to Germany's Bayer.

Earlier this month, Kodak sold its medical diagnostics business to Johnson & Johnson for $1.01 billion.

Kodak shares closed unchanged Monday at $52.625 on the New York Stock Exchange.

Reckitt will pay for the acquisition with new debt and a new stock offering in Britain.

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