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.