Clorox Company, the US company which makes a range of household products, is to join forces with rival Procter & Gamble to form a major new joint venture company in the field of food storage wrap.
The joint venture will be an extension of Clorox' Glad business, which it acquired as part of its merger with First Brands in 1999. Under the terms of the agreement, Glad will have exclusive use of a range of current and future patents, trademarks and other proprietary technologies developed by P&G.
Clorox said the agreement was designed to help drive innovation and growth in the well-established Glad business.
In addition to the use of its technology, P&G will also bring 20 full-time employees to the joint venture, while Clorox will contribute its existing Glad bags, containers and wraps business, as well as making available the related manufacturing equipment and personnel.
P&G will take a 10 per cent stake in the joint venture, with an option to increase this to 20 per cent. The remainder of the company will be owned by Clorox, which will retain control of the Glad business.
"This joint venture would represent a great opportunity to combine the power of the Glad brand and organisation with Procter & Gamble's strong R&D capabilities," said Craig Sullivan, Clorox chairman and chief executive officer.
"By collaborating on the many innovative technologies that P&G brings to the joint venture, we expect to create an exciting stream of future Glad products. Together, we could take the Glad business further - and do it faster - than we could without this partnership. Our companies share many things in common, including core values, how we go to market and a focus on building brands that provide superior performance and value. We expect these important factors would facilitate a strong working relationship and translate to a successful joint venture."
This enthusiasm was shared by A. G. Lafley, P&G chairman: "The Clorox-P&G joint venture will be a win for consumers - and for both companies. We expect that the combination of Clorox's well-established Glad business and P&G's R&D expertise will provide consumers with important new products and outstanding value. We look forward to the opportunity to work with the Glad team to bring new innovations to the market."
In North America, Clorox manufactures and markets a range of products, including freezer, food storage and sandwich bags; food wraps; outdoor, indoor and recycling disposal bags; rubbish bags; and GladWare containers and ovenware. Outside the United States, the company also manufactures and markets nonstick baking paper, ice cube bags, nonstick frying pan sheets, aluminium foil, foil trays, plastic covers, oven bags and Glad-Lock reclosable bags.
P&G is a major producer of food and household products, including Pringles, Folgers, Iams, Pampers, Lenor and Clairol. Its research and development division recently created Impress, a new form of food wrap which does not stick to itself but which still provides excellent sealing when applied to other surfaces.