Unilever nets £1bn from Diversey sale

Unilever has agreed to sell DiverseyLever, its cleaning materials and equipment business, to US-based Johnson Wax Professional in a move that values the unit at $1.6bn (£1.1bn).

The Anglo-Dutch consumer products group, famous for brands such as Magnum ice creams and Dove soap, will use the $1bn of cash it will receive from the sale to help cut its 23bn euro (£14.3bn) debt pile.

Under the deal, Unilever will also gain a $279m loan note and will retain a third of the equity in the combined business, valued at some $300m. It can sell the stake in five years' time.

Niall FitzGerald, the chairman, said the move was in line with Unilever's plan to focus on fewer brands under its "path to growth" strategy.

The combined business will be headquartered in Wisconsin, have annual sales of some $2.6bn and will employ some 14,800 staff, including DiverseyLever's 11,000 workers.

It will be run by Johnson Wax Professional's chairman and chief executive, Gregory Lawton, although DiverseyLever's president, Cetin Yuceulug, will oversee the transaction in the role of "special advisor".

The deal, which is still subject to regulatory approvals, is expected to be completed early next year and is likely to result in job losses. Shares in Unilever closed down 3p at 552p.

Mr Lawton said: "Combining our strengths with those of DiverseyLever will result in a company that has the size, strength and geographic reach to compete anywhere in the world with anyone in the industry."

DiverseyLever, which operates mainly in Europe and Latin America, provides cleaning products and equipment to hospitals and factories. In the year to June, it recorded sales of $1.48bn. Johnson Wax Professional is strong in Japan and North America.

Unilever said it expected to book a profit on disposal of some 100m euros once the deal had completed. It believes its leading brands will account for 95 per cent of total turnover by 2004, up from 85 per cent.