Sara Lee to split into two separate companies
The separation, which the company expects to take place early in the 2012 calendar year, would involve spinning off the company’s North American retail and North American foodservice businesses – excluding beverage – into a new public company under the Sara Lee name, producing brands such as Sara Lee, Jimmy Dean, Ball Park, Hillshire Farm, Chef Pierre and State Fair. An as-yet-unnamed second company would comprise Sara Lee’s international beverage and bakery business, plus the company’s North American beverage business, with major brands including Douwe Egberts, Senseo, Pickwick, Maison du Café, L’OR, Café Pilão, Marcilla and Bimbo.
Sara Lee also unveiled a one-time $3.00 per share special dividend, to be funded primarily by proceeds from the company’s $959m sale of its North American bakery business to Mexico’s Grupo Bimbo, announced late last year.
Sara Lee Corp.’s chairman of the board James Crown said in a statement: “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. These two pure-play companies will have their own distinct growth strategies within their respective core markets that will attract a more focused shareholder base.”
The future of Sara Lee has been uncertain since CEO Brenda Barnes stepped down in August last year after suffering a stroke. It has been selling off parts of the business since then to focus primarily on its core meat and beverage businesses.
According to media reports, the company rejected two buyout offers as too low late last week, from Brazilian beef giant JBS SA and from a group led by private-equity firm Apollo Global Management LLC and investor C. Dean Metropoulos.
Sara Lee has also appointed Marcel Smits, who has served as interim CEO since May, as chief executive officer, and interim CFO Mark Garvey as chief financial officer. In addition, the board said it has appointed Jan Bennink as director and executive chairman, taking over from Crown, who has held the position since May 2010.
