As part of the restructuring, designed to help the family plan for estate duties and inheritance tax, shareholders will get a special dividend of 10p a share, pounds 45m in total.
About pounds 16.8m of that will be paid to external shareholders - who own 37.3 per cent of ABF's shares - while the remainder will go to family members.
Garry Weston, chairman and son of the founder, said that the 10p dividend was intended to compensate external shareholders for the fact that they would have to read a number of thick documents, including listing particulars, required for the rearrangement. But he added that their interest in ABF would remain exactly the same.
The family shareholdings are currently held through George Weston Holdings, a private company which has built up a pounds 230m cash balance, largely through dividends from its 62.7 per cent holding in ABF. Distributing this cash to family members - 33 of whom live in Canada or the US - would, however, have produced a large tax bill.
'In North America, if one or two of the family die it would cause a liquidity problem,' said Harry Bailey, finance director. He added that, because GWH was not quoted, agreeing a value for the shares with tax authorities as part of estate planning would be complicated.
Under the restructuring proposals, ABF shareholders are being asked to swap their holdings for shares in GWH, which will then apply for a stock market listing and change its name to Associated British Foods.
GWH's cash will be distributed to Wittington Investments, another family company, which will also buy GWH's other interests - including a 90 per cent stake in Fortnum & Mason, the upmarket food store - for about pounds 60m.
The deal will leave the family with about 22.4 per cent of ABF, of which 11.8 per cent will be owned directly.
External shareholders will maintain their 37.3 per cent stake while the Garfield Weston Foundation, the charitable trust, will have the remaining 40.3 per cent.
The family has agreed not to sell its ABF shares for at least two years, except with permission from Garry Weston. Three of his sons now work in the business and, although he said 'there is no heir apparent', they are 'highly educated and I would like to think that they will play an increasing role in the business'.
Mr Weston, who is 67, has been with the business for 46 years, 27 of those as chairman. He said he would like to continue for another four years to bring the total to 50.Reuse content