Sara Lee ( SLE) said it agreed to sell its refrigerated dough business to Ralcorp Holdings ( RAH) for $545 million, according to Aug. 9 reports.


Ralcorp said the acquisition would add 30 cents a share to its earnings in the first year after the sale is complete. It plans to fund the deal through short-term debt.

Ralcorp's purchase should help the private-brand food products maker improve its margins after it laid plans last month to spin off its Post Foods cereal unit. That announcement came on the heels of Ralcorp twice rejecting unsolicited takeover bids from ConAgra Foods ( CAG).

Sara Lee announced its intention to divest its refrigerated dough business earlier this year. The unit makes up about 3% of its annual revenue.

The sale comes as part of Sara Lee's larger plan to spin off its North American retail and food service business, a company that will trade publicly and retain the Sara Lee name. That business includes brands such as Hillshire Farm lunch meat, Ball Park hot dogs and Jimmy Dean sausages. The other company, Sara Lee's remaining international bakery and beverages businesses, which includes Douwe Egberts and L'Or brands, was as yet unnamed but referred to as CoffeeCo and could be based overseas.

The split was announced in January, and in May, Sara Lee said it was on track with the split, expected to be complete in 2012.

If you liked this article you might like

Albertsons-Plated Deal Likely 'First Domino to Fall' In Meal Kit M&A

3 Consumer Staples; Trades of the Day: Doug Kass' Views

Warren Buffett Is Losing One Epic Battle With Food

Warren Buffett Evolves as 'Ketchup Stand' Loses Value in Epic Retail Struggle

Nestle, Unilever, Tyson Join IBM's Long List of Blockchain Project Partners