Unilever has signed an agreement to sell its North American laundry business in U.S., Canada and Puerto Rico to Vestar Capital Partners. The global private equity firm will merge the business with its existing operation, Huish Detergents Inc., to form a new company, The Sun Products Corporation (Sun Products).

The consideration consists of a cash payment of $1.1 billion, together with preferred shares in The Sun Products Corporation with a face value of $375 million, and warrants offering the opportunity to acquire up to 2.5% of the common equity of The Sun Products Corporation.

The businesses to be sold include All, Snuggle, Wisk, Surf and Sunlight fabric cleaning and fabric conditioning brands in the U.S., Canada and Puerto Rico, as well as Unilever’s manufacturing facility in Baltimore, MD. The transaction is expected to close in 2008.

Patrick Cescau, Unilever’s group chief executive, said: “We have reached a good deal for both Unilever shareholders and the business. It puts our North American laundry people and brands into a company which is focused on the laundry category and which, with its new combined portfolio, is well-positioned to become a strong player in their market.

“Laundry remains an important category for Unilever outside North America. This transaction will allow us to focus our resources on our leading positions in Europe, Asia, Africa and Latin America where we continue to drive for expanded leadership.”