Sara Lee Could Sell Household, Personal-Care Unit
DOWNERS GROVE, Ill. (AP) -- Sara Lee Corp., which makes Jimmy Dean sausages and Ball Park franks, said Monday that it is considering selling its household and personal-care unit in Europe after receiving some "expressions of interest."
News reports surfaced earlier this month that the food maker might sell the division, which makes products like Kiwi shoe polish and Bloom insecticides, to focus on its core domestic food operations. The business is expected to fetch more than $2 billion.
"We will carefully evaluate all opportunities and do what is in the best interest of the company and its stakeholders," Chairman and Chief Executive Brenda C. Barnes said in a statement.
Shares of Sara Lee fell 13 cents to $8.12 in morning trading Monday.
The potential sale coincides with Sara Lee's recent streamlining of its operations, which includes the spinoff of apparel maker Hanesbrands in 2006. Food makers are shedding unprofitable businesses to focus on their best-selling brands amid the economic slowdown.
Household and bodycare products account for about 15 percent of Sara Lee's sales. The unit, which has annual sales of about $2.3 billion and sells products in Europe, Africa, Asia-Pacific and North America, employs about 8,000 employees globally.
Business in the division has been slumping as consumers overseas pull back on their spending amid the economic crunch. In the company's second fiscal quarter, which ended in December, net sales in the segment dropped nearly 16 percent to $490 million, due to a 3.2 percent drop in unit volumes and unfavorable foreign exchange rates. As the U.S. dollar gains strength, that weighs on companies that do business overseas.
Earlier this month, Deutsche Bank-North America analyst Eric Katzman wrote in a note that such a sale would be "logical" and the company has seen increased competition in the segment in recent years. He valued the business at $2.4 billion.
Sara Lee has more than 44,000 workers worldwide and pulls in more than $13 billion in annual sales from its brands.