Dairy processor and beverage maker Dean Foods Co. said it plans to spin off its specialty foods group to shareholders, and named the former head of Keebler Foods Co. to lead the new company.

The new group would become a $700 million publicly traded private label company specializing in branded, packaged consumer goods with about 1,700 employees. The Dallas-based Dean said former Keebler CEO Sam Reed will head the executive team.

Company officials said the new management team has invested in the specialty unit $10 million in cash, representing 1.67 percent ownership of the new business.

The spinoff, intended as a tax-free distribution to Dean shareholders of a new publicly-traded stock, is expected to be completed in the 2005 third quarter, subject to Internal Revenue Service confirmation of the tax-free transaction, new security registration and other conditions.

Dean Foods, in conjunction with the spinoff, is moving its Mocha Mix non-dairy creamer, food service dressings, and Second Nature egg substitute businesses into the specialty foods group from Dean's branded products and dairy groups.

Source: Yahoo News