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J.M. Smucker to Buy Sara Lee Coffee Unit

ORRVILLE, Ohio — The J.M. Smucker Co. said Monday it has agreed to acquire a majority of the North American foodservice coffee and hot beverage business of Sara Lee Corp. for about $400 million.

The acquisition includes Sara Lee¹s liquid coffee concentrate business sold under the licensed Douwe Egberts brand, along with a variety of roast and ground coffee, cappuccino, tea and cocoa products sold through foodservice channels in North America. In addition, the companies agreed to collaborate on liquid-coffee technology by entering into a long-term foodservice innovation partnership.

"This transaction further strengthens our position as a leading North American coffee company," said Richard Smucker, chief executive officer, J.M. Smucker, which also owns the Folders brand and earlier this year acquired Rowland Coffee Roasters.

The acquisition includes a liquid coffee manufacturing facility in Suffolk, Va.; a leased roast and ground coffee manufacturing facility in Harahan, La.; and coffee equipment and service teams located throughout North America. About 450 workers are expected to join J.M. Smucker from Sara Lee as part of the transaction.

In addition to licensing the Douwe Egberts brand, Smucker also plans to license the Cafitesse and Pickwick brands.

The all-cash transaction is expected to close early next year. The acquisition is expected to add annual net sales of about $285 million at J.M. Smucker.

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