UPDATE 1-Henkel buys laundry care firm Sun Products in $3.5 bln deal

Fri Jun 24, 2016 1:11am EDT
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* Deal adds brands All, Sun, Snuggle

* Transaction to be financed with debt

* Henkel CEO says acquisition is major strategic move (Adds Henkel CEO comment, further details)

FRANKFURT, June 24 (Reuters) - German consumer products group Henkel said it was buying U.S. laundry and home care company The Sun Products Corp from a fund of Vestar Capital Partners in a deal valued at about 3.2 billion euros ($3.5 billion) including debt.

The acquisition, which Henkel will finance with debt, will add well-established brands like laundry detergents All and Sun and fabric conditioner Snuggle to the German company's portfolio and make it the No. 2 laundry care maker in North America.

"This transaction is a major strategic move for Henkel... With the acquisition of Sun Products we will improve our position in the USA, the world's largest laundry care market, and Canada," Henkel Chief Executive Hans Van Bylen said in a statement.

Sun Products has around 2,000 employees and generated annual sales of about 1.4 billion euros in the United States and Canada in fiscal 2015. It has two production sites and one research and development centre in the United States.

The deal will raise the proportion of sales Henkel's laundry and home care division generates in North America to about a third from 13 percent.

($1 = 0.9075 euros) (Reporting by Maria Sheahan; Editing by Paul Carrel)