Sara Lee announced on 2 March that it received a Private Letter Ruling and is now able to provide additional details about the spin-off of its international Coffee & Tea business. The company announced that the spin-off is expected to be completed by the end of June 2012. Post spin-off, the Coffee & Tea business will be domiciled as a new publicly traded company incorporated in the Netherlands. “We are very pleased to reach this major milestone in our spin-off process and to provide our shareholders with additional news about the domiciling of the Coffee & Tea company and the payment of the $3.00 dividend,” said Sara Lee Executive Chairman Jan Bennink in a statement. “With over 250 years of history, the Coffee & Tea business has solid market positions and deep roots in many European markets. Domiciling Coffee & Tea in the Netherlands allows management to be close to its key Western European markets and effectively manage its global portfolio.” In order to execute the spin-off Sara Lee announced it would spin-off all of the shares of its U.S. subsidiary that holds its Coffee & Tea business. Immediately after this spin-off occurs, the U.S. subsidiary will pay a $3.00 special dividend to Sara Lee shareholders. Sara Lee says it expects that this dividend will be eligible for qualified dividend treatment. Subsequently, a new Dutch company will be established as the parent company for the Coffee & Tea business and its shares will be distributed to Sara Lee 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. As a consequence of the spin-off and subject to final approval of the spin by the Board, the company announced that it expects to release approximately US$700 million of deferred tax liabilities currently on its balance sheet. This reversal is expected to occur in the fiscal quarter of the spin-off. The domiciliation of the Coffee & Tea business in the Netherlands is expected to result in U.S. shareholders incurring U.S. tax on any gain attributable to their Coffee & Tea shares. Sara Lee says that it will provide further guidance to its U.S. shareholders on how this gain is computed closer to the date of the spin-off. Sara Lee announced that the Coffee & Tea business intends to move its operating headquarters from Utrecht to Amsterdam in the second half of calendar year 2012. Amsterdam was chosen as the location for the new headquarters in the Netherlands due to its central location and accessibility to an international labor market, the company stated. At the time of the spin-off, Sara Lee says that it now expects to have total debt of approximately US$1.7 billion and approximately $300 million in cash.