Sara Lee Sips Dutch CoffeeCompany - Analyst Blog

Poised to get stronger in the global platform of coffee business, Sara Lee Corporation ( SLE ) moved a step closer to its goal as it agreed to acquire the leading Dutch café store operator, CoffeeCompany. The deal is expected to close within the next 30 days.

CoffeeCompany is an Amsterdam based coffee chain comprising of 35 coffee bars. The takeover will add Sara Lee's already existing brand Douwe Egberts from the Netherlands. Further, the acquisition will take Sara Lee's store counts to 60 in the region.

Late last month, with an eye to bolster presence in the office coffee business, Sara Lee and its Norwegian partner, Kaffehuset Friele, signed a pact with ISS A/S to acquire the House of Coffee business, a food-service provider in Norway and Denmark.

Splitting Apart

Sara Lee is splitting apart, separating into an international coffee and tea business and a North American business that includes the Jimmy Dean and Hillshire Farms brands. The company plans to tear apart in the first half of next year.

Slimming Down

Sara Lee has decided to trim down its portfolio in order to provide the best foundation for a strong and focused business and has more plans stored up for the future.

Sara Lee plans to wind down its North American beverage business. It will discontinue its Senseo coffee brand in North Americas by March 31 of next year. Additionally, it will sell or close the remaining assets of the business.

Recently, Sara Lee has been chucking its redundant units one by one to focus on its most profitable food and beverage businesses.

It has also announced its decision to sell the French refrigerated dough unit. Franco-Canadian private equity firm, Sagard, has emerged as the final bidder in the deal.

The U.S. based packaged food company has decided to shed a major portion of its North American food service coffee and tea operations to The J. M. Smucker Company ( SJM ) for $350 million.

The deal is expected to close in early 2012 and 450 Sara Lee employees are expected to be transferred to Ohio-based J.M. Smucker.

Currently, Sara Lee holds a Zacks #3 Rank implying a short-term 'Hold' rating. On a long-term basis, we maintain an Underperform rating on the stock.

SMUCKER JM ( SJM ): Free Stock Analysis Report

SARA LEE ( SLE ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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