P&G to create The Folgers Coffee Co.
January 31, 2008
by FoodBusinessNews.net Staff
CINCINNATI — The Procter & Gamble Co. announced it is separating its coffee business and creating an independent company called The Folgers Coffee Co.
"We greatly appreciate the contributions of our coffee employees," said A.G. Lafley, chairman of the board and chief executive officer. "For 45 years the coffee business has been an important contributor to the success of Procter and Gamble. This separation allows us to focus on our core businesses and The Folgers Coffee Co. to further develop and leverage its brand portfolio in a coffee-specific business model."
In fiscal 2007, the coffee business had an operating income of about $350 million and sales of about $1.6 billion. The new company will be headquartered in Cincinnati.
The company expects to complete a spin-off or split-off transaction, with preference being given to a split-off. P&G hopes to maximize the after-tax value of the coffee business for shareholders and to minimize earnings per share dilution through the transaction. The company also said the transaction will help it better focus its resources on faster growing categories and enhance its ability to deliver annual financial goals.
Jamie Egasti has been named chief executive officer of The Folgers Coffee Co. He is currently president of coffee and global snacks for P&G.
P&G expects to finalize the deal structure during the April-June quarter and complete the transaction during the July-December period.