The global recession is eating away at Sara Lee Corp. (NYSE:SLE). After a second-quarter announcement in February revealing its Achille's heel in international sales combined with reportedly interested buyers for European based International Household & Body Care, the company announced Monday it would be reviewing its strategic strategy of its International Household unit that may include its placement on the auction block. So, is the possible divestment the right recipe for Sara Lee? It depends upon who you ask.
"It does make a ton of sense," Timothy Ramey, of D.A. Davidson & Co in Lake
Oswego, Oregon, told Bloomberg in a telephone interview. "It's a
business that was always worth more to a small number of third parties
than it could be to Sara Lee."
So who wants to acquire International Household? The Chicago Tribune reported Monday that there is an "expression of interest" but did not name names. Corporate Dealmaker said in a previous post that possible buyers include: Unilever plc, Reckitt Benckiser Group plc, S.C. Johnson & Son Inc. and Colgate-Palmolive Co.
The $2.3 billion business employs 8,000 employees worldwide offering the following products:
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Household: Air care, shoe care, insecticides and laundry care including the Ambi Pur, Kiwi, Pyrel, Vapona, Biotex and Neutral brands
- Body Care: Bath & shower, deodorants, baby care, men's toiletries and oral care including the Sanex, Duschdas, Radox, Zwitsal, Brylcreem, Prodent and Zendium brands
But in the short term, a potential sale of International Household may
be the right remedy for Sara Lee, which reported a decrease in net
sales of 2% in the second quarter, and would continue its four year long divestment strategy. A possible sale of International Household would follow the recent divestment of its coffee brands to Farmer Brothers Co. for $45 million. - Gerald Magpily
See Sara Lee press release
See Corporate Dealmaker post
See Chicago Tribune article
See Sara Lee Dealwatch
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