Reckitt Benckiser has agreed to buy Durex manufacturer SSL International for £2.54bn.
Reckitt Benckiser owns brands such as Cillit Bang, Vanish and Nurofen and the deal will help grow the revenues of its health and personal care business by more than 36% to around £2.8bn.
Bart Becht, Reckitt Benckiser chief executive, said: "The acquisition will add two new 'Powerbrands' with good further growth potential – Durex and Scholl – to Reckitt Benckiser's current arsenal of 17," he said.
The firm expects cost savings of around £100m a year by the end of 2012 and the deal will expand its presence in China and Japan.
SSL chairman Gerald Corbett said: "Reckitt Benckiser is a well-regarded company and I am sure our brands and people will be in good hands."
The firm said there would be some staff reductions at the combined company but there would be a "fair and open" selection process.
SSL reported sales of £802.5m in the year to 31 March and an operating profit of £126m.
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