Hillshire to debut amid acquisition speculation

NEW YORK (AP) -- Hillshire Brands Co. is set make its debut as a public company Friday after spinning off from Sara Lee Corp., and speculation about it being an acquisition target is already under way.

Hillshire will focus on meat brands such as Jimmy Dean, Ball Park and its namesake Hillshire Farm, which Sara Lee acquired in 1971. It will also sell frozen desserts and bakery products.

The other company to emerge from Sara Lee will be an international coffee and tea company called D.E. Master Blenders 1753, referring Douwe Egberts, one of the company's coffee brands. That business will be based in the Netherlands.

In a note to investors this week, Bernstein Research analyst Alexia Howard said there are a range of potential suitors for Hillshire Brands, including Hormel Foods Corp. and Tyson Foods Inc. She noted that no other meat-focused company of Hillshire's size and strong stable of brands had been previously available.

"This will be a transformational deal for whomever makes it, while others could be left behind," Howard wrote.

A representative for Tyson declined to comment. A representative for Hormel wasn't immediately available for comment Thursday morning.

In the meantime, Hillshire Brands says it will intensify its focus on developing products that appeal to changing tastes. For example, the company is testing an "all-natural" hot dog that doesn't have any preservatives under its Ball Park brand and a chicken curry meatloaf under its Aidells brand.

"We used to be a large global conglomerate, so management was focused on a whole range of businesses," said Mike Cummins, spokesman for Sara Lee. He said that meant none of the brands really got the full attention of the CEO.

"Now with the spinoff, everyone in the organization can focus on driving new products," Cummins said. "It will be a much more focused, much more agile company."

Hillshire Brands will trade on the New York Stock Exchange under the symbol "HSH." Sean Connolly, who currently serves as CEO of Sara Lee's North American retail and foodservice operations, will become its CEO.

The company is in Downers Grove, Ill. but will move its headquarters to Chicago early next year.