Sara Lee Corporation announced today that it has signed an agreement to sell PYA/Monarch, a leading foodservice operation, to U.S. Foodservice, a wholly owned subsidiary of Royal Ahold, the nearly $50 billion Dutch supermarket giant and one of the largest foodservice operators in the United States, for $1.57 billion in cash.

The transaction also includes a supply agreement between Sara Lee's U.S. food and beverage manufacturing operations and Ahold. The sale is expected to close by the end of October.

"With the direct sale of PYA/Monarch to Ahold, Sara Lee obtains cash now, eliminates market uncertainty and secures a multi-year supply contract, creating significant value for Sara Lee shareholders," said C. Steven McMillan, chief executive officer of Sara Lee Corporation. "We received a valuation for PYA/Monarch that on an after-tax basis exceeds what we anticipated raising via an initial public offering and we secured a supply agreement that will provide future top-line growth opportunities for our food and beverage manufacturing businesses in the United States."

In May, Sara Lee announced a strategic reshaping plan to narrow the company's focus on three branded consumer packaged goods segments - Food and Beverage, Intimates and Underwear, and Household Products - in which the company enjoys leading category positions around the world. As part of that reshaping, Sara Lee stated its plan for an initial public offering (IPO) and split-off of PYA/Monarch, a similar set of transactions for Coach, and the divestitures of Champion and the International Fabrics division of Courtaulds - all businesses that did not fit within Sara Lee's renewed focus.

At the time of the announcement, Sara Lee said it expected to complete the PYA/Monarch IPO and split-off within 18 months, depending on market conditions, but also stated it would consider any reasonable purchase offer and would choose a course of action that would bring the most value to its shareholders.

"With the divestiture of PYA/Monarch, Sara Lee continues to significantly reshape our business portfolio, focusing our resources on a smaller number of more powerful global growth platforms," said McMillan. "We anticipate using the proceeds generated from the rapid sale of PYA/Monarch - as well as other divestitures - to repurchase stock, retire debt and fund future acquisitions that will continue to build Sara Lee's three business segments."

Sara Lee Corporation (www.saralee.com) is a global branded consumer packaged goods company with approximately $20 billion in annual revenues. Its leading brands include Sara Lee, Douwe Egberts, Hillshire Farm, Hanes and Playtex.