JBS Company Profile

by Stine Olsen Berntsen

JBS is a Brazilian company founded in 1953, and is today one of the largest companies in the food processing sector. The company's brand portfolio includes Friboi, Sola, Swift, Maturatta, Tama and Anglo, among others.  Currently the company is operating in all continents and has more than 120 000 employees. The market capitalization of the company is estimated to approximately R$ 16,040 million, and in the fiscal year ending 2009 total revenues amounted to R$ 55 224 million and EBITDA R$ 3058 million. Last quoted share price is R$ 6,25.

The main shareholders of the company are the following:

• FB Participações S.A (54,52%) – The Batista (founding) family
• Minority Stockholders (17,55%)
• BNDES Participações S.A. – Brazilian development bank (17,02%)
• PROT – FIP (8%)
• Shares in Treasury (2,91%) 

Over the last decade the company pursued an external growth strategy after which they have bought up and acquired numerous other companies, and diversified into new business segments. The company merged horizontally with other beef producers and exporters to gain access to the American and Australian market, and increased production capacity substantially. The acquisition of Pilgrim’s Pride marked the company’s diversification into the poultry market. While the acquisition of Bertin Ltda added up to the continuing diversification efforts by taking over divisions such as leather, products for domestic animals, milk and dairy products, recycling, biodiesel fuels, petrochemical products, personal hygiene and beauty products, collagen, and canning, among others. The capital sources used to finance this acquisition spree has mainly been debt, which has led to a very high leverage where long term debt to equity amounts to 93%.

JBS is organized along the following business units:

• Mercosul beef à conduct domestic and international beef processing in Brazil, Argentina, Uruguay and Paraguay, as well as dairy, leather, pet, biodiesel, collagen, hygiene and cleaning products.
• USA/Australia beef à conduct international beef processing in the United States and Australia, as well as Australian lamb and sheep businesses.
• USA porkà conduct international pork and lamb processing in the United States
• USA Chickenà conduct international chicken processing in the United States and Mexico.
• Europe beef à conduct international beef processing in Europe.

 Sources:

• JBS website-Annual Report 2009, http://www.jbs.com.br/ri/.
• Company website JBS, http://www.jbs.com.br/.
• http://www.reuters.com/finance/stocks/financialHighlights?symbol=JBSS3.SA
• http://finance.yahoo.com/q?s=JBSS3.SA&ql=0

Sara Lee Company Profile

by Katharina Gruber

With roots dated back to 1939, Sara Lee is a long-established American consumer-goods company, headquartered in Illinois. Well recognized brands like Senseo (coffee), Douwe Egberts (coffee, tea), Sara Lee (bakery) and Natreen (sweetener) belong to their portfolio.

The financial highlights for the financial year 2009/2010 have been:

Sales	USD 10,793 millions
EBIT	USD 1,350 millions
Share price (January 3rd, 2011)	USD 17.34
Market Capitalization	USD 11.27 billion
Dividends	USD 0.44 per share
Main Shareholders	AllianceBernstein, L.P. (6,5 %)
	ValueAct Holdings, L.P. (5,6 %)
	HARRIS ASSOCIATES L.P. (5,5 %)
	STATE STREET CORPORATION (3,9 %)
	OAKMARK EQUITY AND INCOME FUND (3,6 %)

Their strategy of diversification by acquisition led to a highly diversified company. Besides food and beverages, amongst others also household, body care, insecticides and laundry belonged to the conglomerate. However, during 2010 Sara Lee discontinued operations in the household and body care businesses and sold the insecticides (to Godrey), air care business (to P&G) and personal care and laundry business (to Unilever). Nowadays, Sara Lee has about 70 brands, operates in more than 40 countries and employs about 33.000 people in following five business sectors:

-        North American Retail: packaged meat (hot dog, sausages, bacon, ham) and frozen bakery products (pies, cakes, desserts)

-        North American Fresh Bakery: fresh bakery products (bread, buns, bagels, rolls, muffins, cakes) sold to retail and institutional customers

-        North American Foodservice: meet, bakery and beverage products to foodservice customers (restaurants, hospitals, supermarkets etc.)

-        International Beverage: coffee and tea products via retail channels and distributors

-        International bakery: bakery and dough products to retail and foodservice customers in Europe and Australia

 Sources:

-  Sara Lee (2010). Annual Report 2009/2010. http://www.saralee.com/sitecore/shell/Controls/Rich%20Text%20Editor/~/media/Investors/Annual%20Reports/2010/Sara%20Lee%202010%20Annual%20Report%20pdf.ashx.

-  Sara Lee (2010). Company Website. http://www.saralee.com/AboutSaraLee.aspx

-  Yahoo Finance (2011). Sara Lee Corporation Common Stock. http://de.finance.yahoo.com/q?s=SLE

-  Reuters (2011). Profile: Sara Lee Corporation. http://www.reuters.com/finance/stocks/companyProfile?symbol=SLE

Introduction to the Purpose and Intentions of the Project

by Alexander Pawellek

Sara Lee, an American food seller, has been engaged in takeover talks for some months. Multiple bidders for the company have emerged, namely a Brazilian meat producer and Apollo Global Management (and its associates). If this deal goes through, a winning bid may value Sara Lee at around $12-15 bio.

The aim of this blog is to explain the development of this takeover until now and cover the current events as they unfold.
Over the past weeks, a team of five MSc Corporate Finance students has followed the news surrounding the takeover closely and has prepared several posts which will be released in the weeks to come.

Numerous factors make this takeover interesting to follow. Firstly, multiple bidders have emerged which is likely to lead to strong rivalry between the interested parties. Secondly, with Apollo Global Management, a PE-house is engaged in the bidding. This is appealing because Private Equity investments have been scarce amid the financial crisis. Additionally, the rationale behind Apollo's bid will be interesting to analyze. Thirdly, with a Brazilian meat producer showing such strong interest in an American company, political attention may be drawn to this takeover in order to protect a potential key strategic market.

In the first posts, the companies will be presented in order to understand the motivation of the parties involved and summarize the takeover talks which started in the late summer of 2010. Following that, recent events will be covered on a weekly basis. This will enable the reader to follow every step in the development of this possible takeover. In addition, the team will comment on the proceedings and likely outcomes and speculate about the agendas which may drive the parties' decisions and motives.

We wish all readers an exciting and insightful experience with our blog.

And for any follower we encourage two things:

1.) Write your own post: once you have read our posts, maybe you have an idea what other aspect of the takeover would be interesting to analyze. Just write your own post and it will be published under your own name in this blog!
And/or
2.) Comment: we welcome all thoughts, suggestions or questions and will try to answer or address them.