Sara Lee shares climb on E.U. sale rumors
March 13, 2009
by Eric Schroeder
DOWNERS GROVE, ILL. — Shares of Sara Lee Corp. rose nearly 8% in early morning trading on Friday to $7.83 before closing at $7.68 following a report in The Wall Street Journal indicating the Downers Grove-based company is looking to sell its household and personal care business in Europe.
According to the WSJ article, a potential sale could raise more than $2 billion. Sara Lee has declined to comment on the rumors.
If Sara Lee is to part with the E.U. business it would continue a trend in recent years to part with operations that no longer fit its focus on core food and beverage products. In the past four years, Sara Lee has sold or spun off 40% of its business, and most recently sold its U.S. food service coffee business, its European meats business and its stake in a Mexican meats joint venture.
The transactions have generated $3.8 billion in proceeds, and Sara Lee has used the money to buyback its shares, pay down debt, and invest in other parts of its business.
Sara Lee’s stock has fallen in the past year and is down about 20% since January. It has traded as high as $15.07 in the past 52 weeks and as low as $6.80.