Europeans May Exterminate Sara Lee’s Insecticide Deal

The European Union’s antitrust regulator is setting its sights on a $200 million deal for a partial sale of an insecticide business owned by Sara Lee, the food company, to S.C. Johnson & Son, which chiefly makes home-care products.

Both companies are based in the United States, and a European Commission press release acknowledged that the transaction may not “have a Community dimension.”  Even so, the Commission continued, the deal may “affect[] trade within the EU market and threatens to significantly affect competition within” countries that requested the investigation. 

The European Commission’s procedures did not trigger an automatic investigation of the deal.  Rather, the regulator began it after receiving requests from half a dozen European countries, including France, Greece, Italy, Belgium, the Czech Republic, and Spain. 

This isn’t the first time that the Europeans have looked at Sara Lee’s dealings.  The Commission is currently looking into a proposed sale of Sara Lee’s body care unit to Unilever, and is expected to rule by the end of October.  In June, the Commission also cleared the sale of Sara Lee’s air freshener unit to Proctor Gamble.  The deals are part of Sara Lee’s plan to sell off businesses unrelated to its core food business.

The insecticide investigation could prove costly to Johnson, which at the end of August finalized its largest debt offering ever, for $550 million in bonds, which were partially slated for the purchase of Sara Lee’s insecticide business.