U.S packaged food company Sara Lee Corporation (SLE) has decided to shed a major portion of its North American foodservice coffee and tea operations to The J. M. Smucker Company (SJM) for $350 million.
The deal is expected to close in early 2012 and 450 Sara Lee employees are expected to transfer to Ohio-based J.M. Smucker.
Sara Lee plans to wind down the rest of its North American beverage business. It will discontinue its Senseo coffee brand in North Americas by March 31 of next year. Additionally, it will sell or close the remaining assets of the business.
Recently Sara Lee has been chucking its redundant units one by one to focus on its most profitable food and beverage businesses.
Early this month, the company announced an agreement to sell its fresh bakery businesses in Spain and Portugal to Mexico's Grupo Bimbo S.A.B. de C.V. The agreement includes all Sara Lee fresh bakery brands in Spain and Portugal as well as seven manufacturing facilities.
Again, last August Sara lee signed an agreement to sell its North American Refrigerated Dough business to Ralcorp Holdings, Inc (RAH), for approximately $545 million. The two retail giants are complete the deal by the end of calendar year 2012.
The company’s policy of streamlining the portfolios to provide the best foundation for a strong and focused business continues with more plans for the future.
Sara Lee, is planning to split itself into two public companies in the first half of next year. The North American unit will be one company and include brands such as Jimmy Dean and Hillshire Farm. The international beverage business will be another company, and will include brands such as Pickwick and Maison du Cafe.
Sara Lee currently holds a Zacks #3 Rank, which implies a short-term Hold rating.
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