Warren Buffett's Berkshire Hathaway Inc (BRKa.N) said it would buy Procter & Gamble Co's (PG.N) Duracell battery business in exchange for its entire $4.7 billion stake in the world's No. 1 household products maker.
P&G, whose brands include Pampers diapers and Tide detergent, said it would contribute about $1.8 billion in cash to recapitalize Duracell before the transaction.
Shares of P&G, which also reiterated its full-year organic sales and core earnings growth forecasts, fell about 1 percent before the bell.
The household products maker said in August it could sell about half of its slow-growing brands and last month said it would sell Duracell to focus on faster-growing brands.
Demand for Duracell's mainstay non-rechargeable, disposable alkaline batteries has waned while a worldwide explosion in electronic devices has increased demand for re-chargeable batteries.
Berkshire owned about 52.8 million shares in P&G as of June 30, or a stake of about 1.9 percent, according to the most recent regulatory filing. (1.usa.gov/1lZ2Ca3)
"I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette," Berkshire Hathaway Chief Executive Warren Buffett said in a statement.
P&G said it would take a non-cash charge of about 28 cents per share in the current-quarter and said it expects to close the deal in the second half of next year.
Goldman Sachs & Co is P&G's financial adviser and Jones Day acted is its legal adviser.
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