Will Sara Lee Sell European Unit?

Sara Lee Corp. (SLE) shares rose sharply this morning on reports that the company was looking to sell its European household unit for more than $2 billion to focus more on the core food and beverage business.

Citing people familiar with the matter, the Wall Street Journal said the company has hired Goldman Sachs to examine possible bidders for the business that accounts for about 15% of its sales. Sara Lee spokesman Mike Cummins declined to comment on what he called speculation.

The Downers Grove, Illinois-based company swung to a loss in the latest second quarter as a stronger dollar weighed on its international sales and consumer spending continued to slump amid the global economic downturn. Sara Lee, which spun off apparel maker Hanesbrands in 2006, has been looking to streamline operations since then.

The Journal pointed to Unilever (UN), Reckitt Benckiser and Colgate-Palmolive (CL) as possible buyers of Sara Lee’s European unit that makes Kiwi shoe polish, Sanex deodorant and Bloom insecticides.

Shares of the company were up 5% to $7.69 at noon on the New York Stock Exchange. They have lost more than half of their value since August.

Read the full analyst report on SLE