Grupo Bimbo S.A.B. de C.V. of Mexico has agreed to acquire Canada Bread Co. Ltd., Etobicoke, Ontario, which is 90 percent held by Maple Leaf Foods, for C$1.83 billion in cash.
Canada Bread makes fresh bread, rolls, bagels, and frozen partially baked or par-baked breads and bagels for both retail and foodservice. Brands include Dempster’s, Olafson’s, POM, Ben’s and Olivieri. It employs approximately 6,400 people at operations in Canada, the U.S. and the United Kingdom. Sales in 2012 were C$1.6 billion with net earnings of C$71 million.
Bimbo already is possibly the biggest baker in the U.S. through its Bimbo Bakeries USA, Horsham, Pa., which had 2012 sales of more than US$6 billion. That subsidiary was assembled through a series of acquisitions: first one-offs, then the 2002 and 2009 purchases of the U.S. baking businesses of George Weston Ltd., then the 2011 buy of Sara Lee’s North American Fresh Bakery business.
“We are very pleased to announce the acquisition of Canada Bread for Grupo Bimbo, given it’s a company with a strong commercial presence, recognized by customers and consumers for its product’s high quality in the different bread categories," said Daniel Servitje, chairman and CEO of Grupo Bimbo, which is based in Mexico City.
"This transaction maximizes the value of our investment in Canada Bread and focuses Maple Leaf on building its leadership in the consumer packaged meats business," said Michael McCain, president and CEO of Maple Leaf. "Grupo Bimbo is an excellent company with strong values and a global leadership position, with little overlap in our geographic markets. This makes for a highly complementary fit with our bakery operations and is expected to provide exciting opportunities for Canada Bread employees, customers and other business partners."
The offer price of C$72 per share represents a 31 percent premium to Canada Bread's closing price on the Toronto Stock Exchange on Oct. 18, 2013, the day before Maple Leaf announced it was exploring strategic alternatives for its bakery business.