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.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“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.