Sara Lee to divide into 2 divisions

CHICAGO — Downers Grove, Ill.-based food maker Sara Lee Corp. announced Friday that it will divide itself into two publicly traded companies. The plan, which has been approved by Sara Lee's board, divides the company into North American and European divisions. One company will focus on North American grocery and supplying products to the restaurant industry, and the other on European coffee, tea and bread.

In a call with investors, Marcel Smits, the company's newly appointed CEO, acknowledged that Sara Lee had received "unsolicited interest" in buying the company. He said that after a rigorous review, the company's board determined that splitting the company was in shareholders' best interest, adding that the individual companies are likely to do better on their own.
Sara Lee will issue a $3 special dividend to shareholders as part of the split.

The decision caps months of speculation about the dissolution of Sara Lee, which once sold everything from pantyhose, bug spray and undershirts to purses and bread, in addition to coffee, sausage and cheesecake. The company has completed a handful of sales that leaves it essentially focused on North American packaged meat and European coffee.

Speculation that the company was on the brink of accepting a buyout offer has brought Sara Lee's stock to a series of consecutive 52-week highs since December. Reports that the company had turned away suitors began taking a toll on stock Wednesday. Sara Lee's shares fell 2.7 percent Friday.

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