VF Corporation has signed a definitive agreement to sell its global intimate apparel business to Fruit of the Loom, Inc., a subsidiary of Berkshire Hathaway, Inc. for $350 million in cash. The agreement is subject to government approvals and customary closing conditions, but is expected to be completed in the first quarter of 2007. VF currently intends to use the proceeds to repurchase shares in 2007. FOTL plans to operate these businesses as Vanity Fair Brands, a wholly-owned subsidiary.
Following the sale, VF will see its lifestyle businesses in the Outdoor and Sportswear coalitions account for 40% of total revenues with its heritage businesses in the Jeanswear and Imagewear coalitions accounting for the remainder. The company also said that it is expecting 8% annual revenue growth including acquisitions, and organic growth of 5% annually.
