|Description of the transaction
On June 28, 2012, the Sara Lee Corporation, EIN 36-2089049, located at 3500 Lacey Road, Downers Grove, Illinois, 60515-5424, ("Sara Lee") separated into two public companies (the "separation"). The separation was effected as follows:
- Sara Lee distributed all of the common stock of DE US, Inc., a domestic corporation and the subsidiary that held Sara Lee's international coffee and tea business ("CoffeeCo"), to an exchange agent on behalf of the Sara Lee shareholders of record as of the close of business on June 14, 2012 (the "record date") in a transaction that qualified as a spin-off under section 355 (the "distribution"). Before the distribution, Sara Lee was the common parent of DE US, Inc.
- Immediately after the distribution of the CoffeeCo common stock, CoffeeCo paid a $3.00 per share special dividend (the "special dividend"). The special dividend was paid to CoffeeCo's shareholders of record as of the time immediately after the distribution of the CoffeeCo common stock.
- After the special dividend, CoffeeCo merged with a subsidiary of D.E MASTER BLENDERS 1753 N.V., a Dutch company ("DEMB") in a transaction that qualified as a reorganization within the meaning of Section 368(a) (the "merger"). After the distribution, and before the merger, the CoffeeCo was owned directly by the public shareholders. In addition, DEMB was, before the merger, a subsidiary of CoffeeCo that was newly formed in anticipation of the merger. As a result of the merger, each share of CoffeeCo common stock was exchanged for one ordinary share of DEMB.
- The exchange agent aggregated and sold any fractional shares of DEMB stock and distributed all of the remaining ordinary shares of DEMB, along with the proceeds from the sale of fractional shares, and the proceeds of the special dividend to the CoffeeCo shareholders. The exchange of CoffeeCo shares for DEMB shares pursuant to the merger requires U.S. Holders of CoffeeCo to recognize gain under Section 367(a). Further, any U.S. Holders that received cash in lieu of fractional shares are required to recognize gain under Section 1001. Shares of DEMB are listed and began trading on NYSE Euronext Amsterdam on July 9, 2012 under the ticker symbol "DE."
- Immediately following the separation, Sara Lee completed a 1-for-5 reverse stock split of its shares of common stock and changed its name to The Hillshire Brands Company.