Under the terms of the agreement, Clorox's Glad bags and wraps operations would be combined with P&G's Impress food wrap and related business.
Managed by Clorox
The venture, agreed to in principle, will be jointly owned by the two marketers but managed by Clorox. The board of the joint venture will include Robert McDonald, president of P&G's fabric and home-care business.
The venture involves two companies that have been fierce competitors over the years in laundry and cleaning categories. But now they'll work together in the $3 billion food storage category.
"We believe this area of alliances is going to be the wave of the future," Mr. Johnston said.
P&G tested Impress, a plastic wrap that doesn't tangle yet sticks to itself and other surfaces, in 2000 but ended the test without expanding the product nationally.
A first for rivals
The deal marks the first time P&G and Clorox have worked together, though P&G has in the past licensed technology to competitors. For instance, P&G in the late 1990s licensed its Olestra fake fat to PepsiCo's Frito-Lay, a competitor to its Pringles potatoe chips, and produced the ingredient in a jointly owned factory. Last year, a joint venture between P&G and Coca-Cola Co. that would have combined the companies' juice and snacks business fell through after sources said Coca-Cola backed out of the deal.
Final terms of the P&G-Clorox deal are still in negotiation, and the agreement in principle is non-binding, the companies said. P&G would have a 10% interest in the joint venture, with an option to increase its interest by an additional 10%. Clorox would own the remainder of the joint venture, as well as assets currently used in the Glad business.