The transaction is expected to close near the beginning of calendar year 2012. The two companies will also establish a long-term partnership to collaborate on liquid coffee innovation.
Jan Bennink, executive chairman of the board, Sara Lee Corp, said: “Our decision to sell a major part of this business to Smucker is an example of Sara Lee Coffee and Tea’s renewed focus on sustainable, profitable growth and part of our mandate to create the strongest possible pure-play company.
“In recent years, our North American coffee business has been foodservice-based and largely unbranded, which is a challenge in a highly competitive marketplace. Our decision to sell a major part of this business to Smucker is an example of Sara Lee Coffee and Tea’s renewed focus on sustainable, profitable growth and part of our mandate to create the strongest possible pure-play company.”
As a result of the licensing and support agreement, Sara Lee will receive a 10-year income stream totalling approximately $50m, plus growth related royalties, which will help cover its research and development and other support expenses.
The company also confirmed that Senseo coffee in North America will be discontinued as of March 31, 2012, with the exception of select online channels. Sara Lee plans to sell or close the remaining assets of the North American coffee business, and expects to provide an update on the process before the end of calendar year 2011.
Source: Sara Lee Corporation
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