Board agrees in principle to split Sara Lee
January 28, 2011 By Bakers Journal
January 28, 2011, Downers Grove, Ill. – Sara Lee’s board of directors has agreed in principle to divide the company into two separate, publicly traded entities.
The plan presented to the board would spin off Sara Lee’s North American Retail and North American Foodservice businesses (excluding the North American beverage business) into a new public company. That company would retain the “Sara Lee” name. Its leading brands would include Sara Lee, Jimmy Dean, Ball Park, Hillshire Farm, Chef Pierre and State Fair.
The yet to be named second company would consist of Sara Lee’s current International Beverage and Bakery businesses, as well as the North American beverage business. Its leading brands would include Douwe Egberts, Senseo, Pickwick, Maison du Café, L’OR, Café Pilão, Marcilla and Bimbo.
In a press release, Sara Lee stated: “Each company will have leading consumer brands, compelling growth prospects and strong potential to deliver long-term value to shareholders.”
The plan calls for the separation to be completed in early 2012.
Sara Lee also intends to declare a $3.00 per share special dividend on its common stock. The majority of this dividend will be funded with proceeds from the sale of the company’s North American Fresh Bakery business. The board expects to declare and pay the dividend in the 2012 fiscal year, before the spin-off is complete.
“Today’s announcement is a logical step following the divestment of our International Household and Body Care business and the announced sale of our North American Fresh Bakery business,” said James Crown, Sara Lee Corp.’s chairman of the board. “We have carefully considered various strategic alternatives, including unsolicited indications of interest in the company. We believe that the spin-off, plus the one-time special dividend, offers the greatest potential for delivering long-term shareholder value.”
Sara Lee is now working to develop detailed implementation plans for the spin-off and will continue to explore a variety of methods to enhance the efficiencies of the two companies’ operating structures.
The separation will be subject to final approval by the board of directors, other customary approvals and the receipt of an IRS tax ruling.
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