DOWNERS GROVE, IL -- Sara Lee Corp. said it is split its food and beverage businesses into two separate companies, in response to pressure from large shareholders.
Under the plan, which the company expects to close by early 2012, it will spin off its North American retail and foodservice businesses into a new public company that will keep the Sara Lee name. The food business -- including the Jimmy Dean, Ball Park and Hillshire Farms brands -- had revenue of $4.1 billion last year.
The second company, not yet named, will consist of Sara Lee's international beverage and bakery business, and North American beverage business, which include the Sara Lee, Douwe Egberts, Senseo and Pickwick coffee brands. Last year, beverages generated $4.6 billion for Sara Lee.
In recent weeks, a group of private-equity investors and Brazilian meat processor JBS both told Sara Lee's board they were interested in buying the company as a whole. Neither of the two groups could offer the $20 per share, or $13 billion, at which the board valued the company.
Sara Lee also announced a one-time $3 per share special dividend, to be funded primarily by proceeds from the company's $959 million sale of its North American bakery business last year to Mexico's Grupo Bimbo, Latin America's largest food company and vending operator.
"We have carefully considered various strategic alternatives, including unsolicited indications of interest in the company," Sara Lee chairman James Crown said. "We believe that the spinoff, plus the one-time special dividend, offers the greatest potential for delivering long-term shareholder value."
Sara Lee also announced that Marcel Smits, who has been serving as interim chief executive since Brenda C. Barnes resigned, will assume the top post permanently. Barnes resigned as chief executive and chairman in August, three months after suffering a stroke.
Jan Bennink will become chairman, replacing Crown, who will continue to serve on the board. C.J. Fraleigh, who serves as Sara Lee's chief executive for North America, will become chief executive of the food spinoff.
Sara Lee has divested several businesses over the past decade to focus on its food and coffee divisions. In 2009, it sold its global body care and European detergents business to Unilever for $1.8 billion. Prior to that, it divested its Coach handbag and Hanes underwear businesses.