Tired of reading about new names? Out of luck because Sara Lee recently recently unveiledD.E. Master Blenders
1753 as the new name for its international tea and coffee business. What is that name? Well, Douwe Egberts (the D.E.) is a name long (like since 1753 long) associated with coffee and that was apparently exactly what they were going for. According to Michiel Herkemij, executive VP and CEO of Sara Lee International Beverage, ”when determining the new name, we thought of things like strong heritage, leadership, dynamic brands, bold growth, operational excellence and a great place to work…D.E Master Blenders 1753 captures all of those elements.” The name must have also “met the positioning and personality criteria for the firm,” and was “evaluated globally for trademark and URL availability, possible cultural sensitivities and local market pronunciation.” Intense.
While I understand reaching into the past and especially to a strong brand for a name, this one seems a bit unwieldy to me. I am not the biggest fan of having numbers in a name (although I kind of like Philips 66), especially four digits. The new company will be based in Amsterdam and operate throughout the globe so hopefully the rest of the world will like it.
The plan for the spin is a bit complicated procedurally. The company will first spinoff all of the shares of its U.S. subsidiary that holds its Coffee & Tea business after which the U.S. subsidiary will immediately pay a $3.00 special dividend to shareholders. Then a new Dutch company will be established as the parent company for the Coffee & Tea business and its shares will be distributed to SLE shareholders. The U.S. Coffee & Tea company will become a subsidiary of the Dutch public parent and a holding company for the Coffee and Tea operations. The company will also release $700m of deferred tax liabilities as a consequence of the spin.
Disclosure: Author holds no position in any stock mentioned.
- Sara Lee Takes Another Step Towards Spinning CoffeeCo (stockspinoffs.com)