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##### **The Clorox Company**News Release

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# The Clorox Company Announces Planto Exchange Shares in Subsidiary for Henkel’s Shares ofClorox Stock

OAKLAND, Calif., Oct. 6, 2004 – The Clorox Company (NYSE: CLX)(PSE: CLX) today announced it has reached a definitive agreementwith major shareholder Henkel KGaA under which Clorox will atclosing exchange full ownership interest in a subsidiary forHenkel’s approximately 61.4 million shares of Clorox commonstock. Henkel’s shares represent approximately a 29 percentstake in Clorox.

At closing, the subsidiary will haveClorox’s ownership interest in: (1) the existing insecticidesbusiness, which includes Combat®, HomeMat® and Home Keeper® brandedproducts; (2) the Soft Scrub® cleanserbusiness; (3) Clorox’s 20 percent interestin Henkel Iberica, S.A., a joint venture with Henkel for consumerproducts in Spain and Portugal; and (4) approximately $2.1 billionin cash.  Clorox and Henkel have agreed to an aggregate valueof approximately $745 million for thebusinesses and the Henkel Iberica investment beingtransferred.

Under the agreement, about 135employees will transfer to Henkel, primarily from the newsubsidiary’s operations in South Korea.

As part of the agreement, Cloroxwill provide certain transitional services, including some interimproduction of insecticides and SoftScrub®.

“We’re very pleased with the agreement,”said President and Chief Executive Officer Jerry Johnston.“We believe reacquiring Henkel’s outstanding shares isa good investment to increase value for all our shareholders. Theagreement is also consistent with our portfolio strategy.Transferring these non-strategic businesses to Henkel will furtherenable us to focus on building our corebusinesses.”

Clorox intends to use a combinationof existing cash and the issuance of commercial paper to initiallyfund the cash that will be included in the subsidiary at closing.Subsequent to closing, Clorox intends to issue approximately $1.5billion to $1.7 billion in long-term debt to reduce outstandingcommercial paper balances. Clorox plans to use its cash flow toreduce debt over the next few years.

“Importantly,given our strong free cash flow, we can pay down debt over the nextseveral years while maintaining the flexibility to consider modestshare repurchases and increases in our dividend, as well as smallacquisitions and other opportunities to drive growth,”Johnston said. “The choices and direction coming out of our2008 strategy, which we recently presented in New York, have notchanged.”

Clorox expects the exchange toqualify as a tax-free exchange under Section 355 of the InternalRevenue Code. As part of the transaction, both Clorox and Henkelwill receive opinions from independent tax advisors that thetransaction should qualify as a tax-free exchange. Goldman, Sachs& Co. served as financial advisor to Cloroxon the transaction. Cravath, Swaine & Moore LLP andBaker & McKenzie provided legal and tax advice to the company.Morgan Stanley & Co. Incorporated provided valuation advicewith respect to the businesses transferred.

As a result of this transaction,other than the interim services being provided, Clorox will nolonger have an ongoing relationship withHenkel. Upon closing, Henkel’s right to representation onClorox’s board of directors will end.

The transaction is expected to closeno later than Dec. 1, 2004, subject to customary closing conditionsand regulatory approvals.

In fiscal year 2004, the operatingbusinesses being transferred had net sales ofapproximately $161 million, and had pretax earnings from continuingoperations of $86 million. In addition, in fiscal year 2004 Cloroxreported approximately $11 million of equity in earnings ofunconsolidated affiliates and royalties related to its investmentin Henkel Iberica, which was recorded in otherincome.

**Outlook**

For fiscal year 2005,assuming a Dec. 1, 2004, closing of the transaction, the companyanticipates the incremental impact of this transaction to increaseearnings per diluted share in the range of 7 cents to 10 cents,excluding the book gain to be recognized on the transfer of thebusinesses and the investment in Henkel Iberica. Upon closing thetransaction, Clorox anticipates recognizing a gain on the transferof the businesses and the investment in Henkel Iberica in the rangeof $3.00 to $3.15 per diluted share.  For fiscal year 2006, thecompany anticipates a high single-digit accretive impact on earningsper diluted share from this transaction. For fiscal years 2006 through 2008,the company anticipates double-digit earnings-per-diluted-share growth, drivenby operating profit growth and lower interest expense from usingcash to pay down debt. With respect to its long-range financialgoals through fiscal year 2008, after adjustments to reflect thebusinesses transferred, Clorox anticipates sales growth in therange of 3 percent to 5 percent per year.  Clorox will providea more complete update of its fiscal year 2005 outlook after thetransaction closes.

**Conference Call**

On Thursday, Oct. 7,at 5:30 a.m. PT (8:30 a.m. ET), Clorox will host a live audiowebcast of a brief conference call with the investment communityregarding this announcement. The webcast can be accessed atwww.clorox.com/investors. Following the live discussion, a replayof the webcast will be archived for one week on the company’sWeb site.

**The CloroxCompany**

The Clorox Company isa leading manufacturer and marketer of consumer products withfiscal year 2004 revenues of $4.3 billion. Clorox markets some ofconsumers’ most trusted and recognized brand names, includingits namesake bleach and cleaning products, ArmorAll® and STP® auto care products,Fresh Step® and Scoop Away® catlitters, Kingsford® charcoal briquets, HiddenValley® and K C Masterpiece®dressings and sauces, Brita® water-filtrationsystems, and Glad® bags, wraps and containers. With8,600 employees worldwide, the company manufactures products in 25countries and markets them in more than 100 countries. Clorox iscommitted to making a positive difference in the communities whereits employees work and live. Founded in 1980, The Clorox CompanyFoundation has awarded cash grants totaling more than $58.3 millionto nonprofit organizations, schools and colleges; and in fiscal2004 alone made product donations valued at $5 million. For moreinformation about Clorox, visit www.clorox.com/company.

**Forward-LookingStatements**

Except for historicalinformation, matters discussed above, including statements aboutfuture volume, sales and earnings growth, profitability, costs,cost savings or expectations, are forward-looking statements basedon management's estimates, assumptions and projections. Importantfactors that could cause results to differ materially frommanagement’s expectations are described in "Forward-LookingStatements and Risk Factors" and "Management's Discussion &Analysis" in the company's SEC Form 10-K for the year ended June30, 2004, as updated from time to time in the company's SECfilings.  Those factors include, but arenot limited to, general economic and marketplace conditions andevents, competitors’ actions, the company's costs, theeffects on cash flow of tax payments and share repurchases,including interest costs and repayment of debt incurred to financerepurchases, the ability to manage and realize the benefits ofjoint ventures and other cooperative relationships, risks inherentin litigation and international operations, the success of newproducts, the integration of acquisitions, and environmental,regulatory and intellectual property matters.

In particular, our estimates offuture performance, including the accretiveness of this transactionand resulting earnings-per-share expectations, are subject to risksparticular to this transaction, including the sustainability of ourcash flows and the actual level of debt costs. Rating agencydecisions and other external factors could increase interest costs.Declines in cash flow, which reduce the company’s ability torepay debt, or interest cost increases greater than managementexpects, could adversely affect the company’searnings.

**CloroxContacts**

*MediaRelations:                                                     Investor Relations:*

Kathryn Caulfield(510)271-7209                              Steve Austenfeld (510) 271-2270

Dan Staublin (510)271-1622                                    Michael Iracondo (510) 271-2156

**Henkel Contacts**

*CorporateCommunications:                                     Investor Relations:*

Ernst Primosch +49-211-797-3533                           Oliver Luckenbach + 49-211-797-1631

Lars Witteck +49-211-797-2606