Reckitt sells Essential Home stake to Advent for $4.8 billion
The consumer goods group said it would retain a 30% stake in the business, which makes Air Wick fresheners, Cillit Bang cleaners and insecticide Mortein.
Reuters exclusively reported last month that the two parties were in talks over a sale, with Reckitt likely to retain a minority stake.
Reckitt CEO Kris Licht has been trying to turn around the business and ease shareholder concerns over the strength of its brands in North America and Europe, where consumer confidence has been weak.
Reckitt said it plans to return excess capital to shareholders, including a special dividend of about $2.2 billion and a share consolidation, after the deal closes.
Reckitt shares were up about 1.2% in early trade.
Essential Home accounted for about 13% of group revenue in the first quarter but has struggled for several quarters, with sales down 7% year on year in the first three months of the year.
The value of the transaction includes up to $1.3 billion in performance-based and delayed payments tied to how the business performs and other financial conditions, it said, adding that the deal is expected to close by the end of the year.
Reckitt, brands of which include Dettol handwash and Durex condoms, has also been considering options for its litigation-hit baby formula business, Mead Johnson.
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