Cleaning products company Johnson Wax Professional on Tuesday said it would buy the commercial cleaning business of Anglo-Dutch consumer goods group Unilever Plc for $1.6 billion to expand its product line and international reach.

The deal for Unilever's DiverseyLever would also give Unilever a one-third stake in privately held Johnson Wax, for the next five years, Johnson Wax said in a statement. 

Unilever said Johnson Wax, which would become the second largest company in its industry behind Ecolab, would buy back its stake after that time. The new company will likely cut some jobs and close plants, Johnson Wax said. 

Unilever said it would receive $1 billion in cash from Johnson and a $279 million loan note and said its stake in Johnson would be worth $300 million, bringing the value of the deal to an estimated $1.6 billion. 

DiverseyLever's industrial strength cleaning products are used to clean hospitals, restaurants, and hotels, and its major clients include McDonald's Corp.'s. The company also offers cleaning services, but this accounts for a small part of its business. 

Unilever said the sale of DiverseyLever, whose cleaning products are not a well-known consumer brand name, is part of its strategy to refocus its business on recognizable brands. The company announced this five-year strategy in February 2000 to trim its then 1,600 brands to 400. 

Last week, the company sold its Iglo brand name to Hungarian canned food maker Globus. It also recently sold a soup division to Campbell Soup Co. and its Elizabeth Arden cosmetics business. This is in addition to exiting such businesses in recent years as industrial starch, oilseed crushing and animal feed. 

Unilever wants to focus on such brand names as Lipton, Hellman's and Skippy, as well as personal care products such as Q-tips and Vaseline. 

Analysts said the deal puts Johnson Wax in a better position. 

"In the long run, this definitely creates a stronger competitor in a market which was dominated by Ecolab," said David Begleiter, analyst at ABN Amro. 

Begleiter said DiverseyLever has a stronger position in Europe and is more competitive globally, but Johnson Wax would have to invest a lot of money to threaten Ecolab's position in the United States. 

"Johnson Wax has a long way to go before it can effectively compete with DiverseyLever in the U.S.," Begleiter said. 

According to Johnson Wax, the newly formed company would be the second largest in the $35 billion worldwide industrial cleaning business, with a 17 percent market share. The company said Ecolab Inc. had a market share of 20 percent. 

The deal comes at a difficult time for the low-margin commercial cleaning industry. 

"Typically, this industry is not cyclical, but Sept. 11 hurt the hotel and restaurant business and lowered the industry's short term outlook," said Midwest research analyst Dmitry Silversteyn. 

Unilever analysts said the deal would help reduce the company's debt after its $24.3 billion Bestfoods takeover in October of 2000. 

Unilever said the deal would hurt earnings by 60 million to 70 million euros in the first quarter of 2002, when it is expected to close. 

Johnson Wax said in its conference call that it expected some job losses and plant closings, but did not have specifics at this time. It said the business did not have a significant amount of overlap because Johnson Wax focuses more on retail store and home cleaning products. 

The company also said Unilever would maintain the stake in part to make the deal more economically feasible for Johnson Wax, which said it would use bank debt and public funds to pay for the rest. 

"Combining our strengths with those of DiverseyLever will result in a company that has the size, strength and geographic reach to compete anywhere in the world with anyone in the industry," Johnson President and Chief Executive Gregory Lawton said. 

"Our complementary product platforms -- Johnson Wax Professional's expertise in housekeeping and floor care and DiverseyLever's strengths in ware-washing, laundry, and food processing and sanitation -- will significantly enhance our offering," Lawton said. 

Unilever said Johnson Wax would have management control of the new company, which is expected to have sales of $2.6 billion. The DiverseyLever cleaning product and services business has 11,000 employees and 49 manufacturing sites worldwide. 

In late afternoon trading, Unilever shares were up 11 cents at $31.51 on the New York Stock Exchange.