Hillshire Brands seen as takeover target
As the new Hillshire Brands Co. completes its transition from Sara Lee Corp., some industry experts see the company as an inviting target for acquisition. Bloomberg notes that Alexia Howard, a Sanford C. Bernstein & Co. analyst in New York, said in a report that potential suitors for the company could include Hormel Foods Corp. and Tyson Foods Inc.
“This will be a transformational deal for whoever makes it,” Howard said in the report.
Hillshire include the top-selling brands Hillshire Farms, Jimmy Dean and Ball Park. Sean Connolly, the CEO of the new company, has a goal in place for 5 percent annual revenue growth. He notes that the company's meat products were once part of a larger conglomerate that included everything from clothing to cheesecake.
“We haven't had a focused food company, so we haven't had the innovation we need,” Connolly said. “We see enormous potential for growth. Meat-centric meals is a $68 billion business and we have $3 billion of it.”
Since the start of the year, Connolly has set up a new research & development team to come up with new creations and is using Aidells, which Sara Lee acquired in 2011, to help spread innovation to the rest of the Hillshire brands. He also cut staff, which is expected to save $100 million over the next three years. The result of these actions, he says, will streamline the time it takes Hillshire to get new products to market.
“We had analysis paralysis,” Connolly said. “So we consciously downsized the organization so it's leaner. We have fewer meetings and fewer check-offs on decision-making.”
Source: Bloomberg, Chicago Tribune