UPDATE 1-Sara Lee to spin off drink unit, not meat unit

Tue Jun 14, 2011 12:20pm EDT

* Sees more efficiencies from spinning off coffee biz

* Says DOJ has issues w/ sale of bakery unit to Bimbo

* Sara Lee shares up 1 percent

NEW YORK, June 14 (Reuters) - Sara Lee Corp SLE.N will spin off its international coffee and tea business instead of its North American meats business as it had planned, it said on Tuesday.

The change of strategy comes nearly five months after the maker of Jimmy Dean sausages and Senseo coffee said it planned to split into two pure-play companies after takeover bids failed to entice it to sell the entire company. [ID:nN28290310]

"As we began to get into the details of separating the two businesses, we determined there are greater efficiencies to be gained from spinning off the international coffee business," Jan Bennink, executive chairman, said in a statement.

Sara Lee shares were up 19 cents, or 1 percent, at $18.88 in midday trade on the New York Stock Exchange.

The company also said it believes the planned sale of its North American bakery business to Mexico's Grupo Bimbo (BIMBOA.MX) will close early in fiscal 2012, despite antitrust concerns over the deal by the U.S. Department of Justice. It said Bimbo has had substantive discussions with the department and is working with it to agree on potential remedies. (Reporting by Martinne Geller; editing by Gunna Dickson)

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