Sara Lee to split into 2 businesses - KAIT Jonesboro, AR - Region 8 News, weather, sports

Sara Lee to split into 2 businesses

DOWNERS GROVE, Illinois (AP)- Sara Lee Corp. is splitting into two public companies, completing a long series of movies that took the company from a conglomerate to a smaller business focused on food.

One business will concentrate on meat and food service while the other is centered on coffee and baked goods.

The company said Friday the retail and food-service unit will retain the Sara Lee name and will include that brand as well as Jimmy Dean, Ball Park, Hillshire Farm and others.

The other unit has yet to be named. It will include coffee-related brands Douwe Egberts, Senseo, Pickwick, Maison du Cafe, L'OR, Cafe Pilão, Marcilla and Bimbo.

Sara Lee, in Downers Grove, Illinois, says the split is the next logical step after selling its international household and body care business and agreeing to sell its North American fresh bakery business.

The company has been selling off its business lines for several years to focus on the core food and beverage business.

Sara Lee has also cut debt and been a potential acquisition target. It has been in flux since its CEO, Brenda Barnes, stepped down last summer to recover from a stroke.

Sara Lee board chairman James Crown said the company considered strategic alternatives, including takeover offers, but determined the spinoff and dividend "offers the greatest potential for delivering long-term shareholder value."

The company named Marcel Smits, 49, as permanent CEO. He had been serving as interim CEO since Barnes left.

Sara Lee named Jan Bennink, 54, a director and executive chairman, replacing Crown, who will continue to be a director. He will lead the spinoff.

Sara Lee also named Mark Garvey, 46, as chief financial officer. He had been in that position on an interim basis since May.

C.J. Fraleigh, 47, Sara Lee's CEO of North America, will become CEO of the retail and foodservice spinoff.

Before the split, the company will pay a $3 a share special dividend.

Sara Lee also lowered its guidance for fiscal 2011 to 85 cents to 89 cents per share from 87 cents to 94 cents per share. It cited higher green coffee costs that weren't totally offset by raising prices, a tax matter and changes to share count and interest expense assumptions. Analysts expect 94 cents per share.

Shares rose 11 cents to $17.75 in premarket trading.

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