Sara Lee Decides to Split in Two
DOWNERS GROVE, Ill. -- Sara Lee Corp., the maker of Ball Park hot dogs and Douwe Egberts coffee, decided to split itself in two after failing to agree to takeover offers. The company announced a plan to spin off its meat business as a new public company by early 2012, Bloomberg reported.
The board also named Marcel Smits as chief executive officer. Smits has led Sara Lee on an interim basis since May, when predecessor Brenda Barnes suffered a stroke. The spinoff will leave Smits, 49, with a business focused on beverages -- operations that generated about $4.6 billion in the latest fiscal year and include brands like Senseo, the report stated.
Sara Lee decided on the split after spurning recent bids from JBS SA and a buyout group led by Apollo Global Management LLC, people familiar with the matter said this week. The separation will make the two new businesses more attractive takeover targets, according to Consumer Edge Research LLC’s Robert Dickerson, a food analyst based in Stamford, Conn.
The moves represent the culmination of a six-year transformation for Sara Lee, from a maker of everything from apparel to shoe polish, to a company focused solely on food and beverages.
The company’s beverage business has yet to be named, while the new meat and foodservice operations will keep the Sara Lee title after the spinoff and be led by C.J. Fraleigh, CEO of the North American retail and foodservice division. The business, which includes brands like Ball Park and Jimmy Dean breakfast sausages, generated about $4.1 billion in the latest fiscal year.
Sara Lee also appointed Jan Bennink as chairman effective immediately, and said the executive’s main responsibility is taking care of the spinoff.
Sara Lee’s sales have dropped for two straight years amid increased competition for recession-weary shoppers. The company has already sold off businesses such as its body-care division to devote more resources to coffee and meat, the Bloomberg report noted.