DOWNERS GROVE, ILL. — Sara Lee has received a Private Letter Ruling and has announced the spin-off of its international coffee and tea business is expected to be completed by June with a new publicly-traded company being incorporated in The Netherlands.
“We are very pleased to reach this major milestone in our spin-off process and to provide our shareholders with additional news about the domiciling of the Coffee & Tea company and the payment of the $3 dividend,” said Jan Bennink, executive chairman. “With over 250 years of history, the Coffee & Tea business has solid market positions and deep roots in many European markets. Domiciling Coffee & Tea in The Netherlands allows management to be close to its key Western European markets and effectively manage its global portfolio.”
The Private Letter Ruling confirms key requirements for tax-free treatment of the spin-off will be satisfied.
Sara Lee also announced it will spin off all the shares of its U.S. subsidiary that holds its coffee and tea business. After the spin-off occurs, the subsidiary will pay a $3 special dividend to Sara Lee shareholders.
A new Dutch company will be established as the parent company for the coffee and tea business, and its shares will be distributed to Sara Lee shareholders. The U.S. coffee and tea company will be a subsidiary of the Dutch public parent and a holding company for the coffee and tea operations.
The coffee and tea business also will move its operating headquarters from Utrecht to Amsterdam in the second half of 2012. Amsterdam was chosen as the headquarters due to its location and accessibility to the international labor market.