Sara Lee Corporation
) recently announced that its board of directors has approved the
spin-off of its international coffee and tea business into a
separate publicly traded company. Moreover, as part of the split,
the company also announced a special dividend of $3.00 per share to
its shareholders. The board also approved a 1-for-5 reverse stock
split immediately after the spin-off. The spin-off is expected to
be completed by the end of June.
The coffee and tea company to be called CoffeeCo will distribute
its common stock to Sara Lee shareholders on June 28, 2012, to the
shareholders of record June 14. Thereafter, the special dividend
will be paid to CoffeeCo shareholders on record immediately after
the distribution of the CofeeCo common stock. CoffeeCo will then
merge with a subsidiary of D.E. Master Blenders 1753. Subsequently,
the shares of D.E. Master Blenders 1753 will be distributed among
Post spin-off, the international coffee and tea business will be
domiciled in the Netherlands and will move its headquarters to
Amsterdam in the second half of 2012. Its operations will be spread
across Europe, Brazil, Australia and Thailand and will include
popular tea and coffee brands such as Douwe Egberts, Senseo, L'OR
EspressO, Marcilla, Pilão, Moccona, Pickwick and Hornimans.The
company which will retain the legacy Sara Lee name will include the
North American retail, foodservice and specialty meats
The spin-off is part of Sara Lee's plan to trim its portfolio in
order to provide the best foundation for a strong and focused
business. Sara Lee has been shedding its redundant units one by one
to focus on its most profitable food and beverage businesses.
Among the latest deals, in early January this year, Sara Lee
completed the sale of the majority of its North American
Foodservice coffee and tea operations to
The J.M. Smucker Company
) in an all-cash transaction. In December 2011, Sara Lee had
divested its fresh bakery business in Spain and Portugal to
Mexico's Grupo Bimbo S.A.B. de C.V.
We currently have a Neutral recommendation on Sara Lee
Corporation. The stock carries a Zacks #3 Rank (short-term 'Hold'
SMUCKER JM (SJM): Free Stock Analysis Report
SARA LEE (SLE): Free Stock Analysis Report
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