Sara Lee 'Goes Meat' With Hillshire Farms Brand

Jun. 6.12 | About: Hillshire Brands (HSH)

By Katey Stapleton

Cakes, meats and drinks are to be divided among the continuing Sara Lee (SLE) divorce that has made headlines of late. The most recent news in the divvying up of the food and beverage distributor? SLE has chosen to adopt Hillshire Brands' name for its North American business, opting to trade "SLE" in for "HSH" on the NYSE once the transformation is complete.

Famous for baked goods, meats and many acquisitions, SLE has come to the conclusion that trading under different names and separating its beverage division from foods is the best way to assure $100 million in cost savings by 2015, according to Reuters. The first piece of the company to be sliced in half is its hot beverage category, which will soon be spun off as an international business under the name D.E. Master Blenders 1753. Following the separation of liquid consumables, SLE will be added to Hillshire's already extensive list of Jimmy Dean, Ball Park, Hillshire Farm, Chef Pierre, and State Fair brands.

Fans of the longtime-operating global manufacturer will be pleased to know that SLE plans to continue being known as Sara Lee Foodservices following the spin-off. Hillshire Brands, acquired by SLE in 1971, will continue to garner strong equity for itself and SLE as it always has strove to do.

"A key goal was to retain the strong equity with consumers and customers that the Hillshire name brings us," Sean Connolly, CEO of Sara Lee North American Retail and Foodservice said in a statement. "Hillshire is a name that stands for quality, integrity and superior taste."

Following a difficult quarter reported in May, SLE may have whipped up the cure for its lower-than-expected profits and shaky full-year outlook with the new Hillshire Brand division. Connolly expects Hillshire Brands to reach net sales growth of 4% to 5% by the end of 2015, along with volume growth of 2% to 3%.

Come June 28, Hillshire Brands will begin trading as a standalone company. SLE is currently trading around $20.57, up 8.72% year to date.

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