The Slow Dismantling of Sara Lee

Most of the once-great conglomerates of the 1960s and 1970s have been dismantled over the years. Think of companies such as ITT, Gulf & Western, Textron, and the like. These companies could no longer justify that the whole was greater than the sum of the parts. Thus, they embarked on break-up strategies. Sara Lee once consisted of a large number of diverse businesses. Over the years, the company has owned brands such as Coach, Playtex, Champion, Jimmy Dean, Piggly Wiggly Supermarkets, and Hanes. Slowly, the firm has been divesting businesses over the past decade. Despite these divestitures, the company's stock performance has not always been as strong as management and the stockholders would like. Now, we hear news that a Brazilian firm is contemplating a takeover offer for Sara Lee. In my mind, the Sara Lee situation raises the question: Should the company have moved more dramatically to break up the firm, rather than going for the "drip, drip, drip" approach to divestitures, gradually shedding businesses year after year? Would a bold move been better than death by a thousand cuts?