Sara Lee Corporation has approved the capital structure for the planned tax-free spin-off of its apparel business into a separate, publicly traded company called Hanesbrands Inc., which includes brands like Duofold, Champion, Beefy Tee, and Hanes.
Hanesbrands will borrow $2.6 billion to establish the enterprise as a stand-alone, independent company. In connection with the spin-off, Sara Lee will receive a one-time payment of $2.4 billion from Hanesbrands.
In the spin-off, Sara Lee will distribute to its stockholders all of the outstanding shares of Hanesbrands common stock, with the distribution ratio to be determined shortly before the spin-off occurs. Sara Lee expects to complete the spin-off of Hanesbrands by the end of September 2006. In fiscal 2005, this business generated $4.7 billion in net sales, up from $4.5 billion in 2004.
