Sara Lee Divides Company in Half

By Robert Davis
Jan 30 2011

Sara Lee announced yesterday that they would divide the US-based operation in half after rejecting several buyout offers from firms all over the world.

The division of the company will be an equal split. Besides the baked goods for which they are best known, Sara Lee is also a maker of meats, pre-packaged and sold through grocery stores all over the world. Currently both reside under the same company but the two will soon become separate entities.

Sara Lee entered the meat business about 10 years ago. They currently operate under the brand names of Sara Lee, Hillshire Farms, Jimmy Dean and Ball Park. This part of the business was the main interest for the last takeover bidder, JBS, the world’s largest producer of meats.

However, the last round of bidding would have meant that JBS would have bought the baked goods division as well, something that they have little experience with. The fear, by the board of directors with Sara Lee, is that JBS would sell off the baked goods department or possibly kill the line altogether.

Still, the board announced that they are still willing to entertain offers from outside companies. But there are several reports that the interested parties are not willing to amend their bids after being rejected the first time around without any reasoning. The Apollo Group, the first bidder, said that they make another bid but only after negotiating the debt for Sara Lee, which is extremely high at this point.