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Bimbo To Buy Sara Lee Bakeries for $959 Million

FoodProcessing.com
11/09/2010

Bimbo Bakeries USA (BBU), already the largest baker in the U.S., announced in November its parent company, Grupo Bimbo, S.A.B. de C.V., will acquire the North American Fresh Bakery business of Sara Lee Corp., the nation’s third largest bakery group.

BBU said it will invest more than $1 billion in the U.S. over the next five years to create an efficient manufacturing and service platform. "We will build new bakeries where we need them. We will renew existing facilities. And we will improve our technology and infrastructure," said Gary Prince, BBU president. “We are investing in manufacturing facilities and manufacturing jobs across the United States."

The acquisition is subject to regulatory review. The reported price, $959 million, was only a third of what Sara Lee, based in Downers Grove, Ill., paid to get deeply into the bakery business in 2001, when it bought Earthgrains, then the nation’s second largest baker. The divestiture does further Sara Lee’s plans to focus on its domestic processed meats and international coffee businesses.

Bimbo called the acquisition “highly complementary across product lines, bakeries and geographies.” While Bimbo’s past acquisitions have left it with many whole-grain and specialty breads, Sara Lee is heavily into white bread and buns, including its Soft & Smooth whole-grain white bread. And Sara Lee’s production plants are focused in the Midwest and Southeast, while BBU's base is in the Northeast and Texas.

Bimbo will use the Sara Lee name for fresh-baked products around the world except for Western Europe, Australia and New Zealand.

Grupo Bimbo first established itself in the U.S. when it bought California tortilla company La Hacienda in 1994. Three years later it added Pacific Pride Bakeries of San Diego. A larger acquisition was the 1998 purchase of Mrs. Baird’s Bakeries in Texas, which at the time was the largest family-owned bakery in the U.S. The combined operations were renamed Bimbo Bakeries USA with headquarters in Fort Worth, Texas.

In 2002, Bimbo acquired the Western U.S. baking business of George Weston Ltd., adding such brands as Oroweat bread and buns, Entenmann’s sweet baked goods, Thomas’ English muffins and bagels and Boboli pizza breads. In 2009, Grupo Bimbo purchased Weston’s remaining U.S. fresh baked goods business, adding brands such as Arnold, Brownberry, Freihofer’s and Stroehmann and making Bimbo Bakeries USA the largest bakery company in the U.S. Company headquarters were moved to the former Weston offices in Horsham, Pa.

When the Sara Lee deal is complete, the combined company will have more than 28,000 associates, will operate 75 bakeries in 31 states and will serve the entire U.S. market through a network of some 13,000 sales routes.

Parent Grupo Bimbo is one of the world's largest baking companies with over 102,000 associates and operations in 17 countries throughout the Americas and China.