We cannot live by bread alone


Analysts were right on track when they predicted Sara Lee Corp. would divest more of its businesses. Yesterday the company agreed to sell its North American Fresh Bakery business to Grupo Bimbo, one of the world's biggest baking companies (with brands including Arnold, Boboli, Brownberry, Entenmann's, Francisco, Freihofer's, Marinela, Mrs Baird's, Old Country Bread, Oroweat, Stroehmann, Thomas, and Tia Rosa) for $959 million. The proposed deal, subject to customary closing conditions and regulatory clearances, is anticipated to close in the first half of calendar year 2011.


"The sale of the North American Fresh Bakery business will allow us to aggressively invest in our core protein and coffee businesses, said Sara Lee Corp. interim CEO Marcel Smits."In both categories, we are a leading player, with healthy margins and a strong track record of innovation. We are actively pursuing growth here, organically and through acquisitions." 


The combination of Sara Lee's North American Fresh Bakery business with Bimbo Bakeries USA creates a leading national fresh bakery company in the U.S. In the twelve months ended October 2, 2010, Sara Lee's North American Fresh Bakery business generated $2.1 billion in adjusted net sales and $38 million in adjusted operating segment income.


Both Sara Lee and Grupo Bimbo are committed to further developing the strong brand equity that has been built up in the Sara Lee name over many decades. As a part of this transaction,Sara Lee will retain the right to sell Sara Lee branded frozen desserts and protein products, like sliced deli meats. Grupo Bimbo will have the rights to the Sara Lee brand in the fresh baked goods category globally, with the exception of Western Europe, Australia and New Zealand. In addition to the national fresh bakery brand Sara Lee, the acquisition provides Grupo Bimbo with a collection of leading regional bakery brands, such as Grandma Sycamore's, Heiner's and Rainbo. 


As part of the transaction, all of Sara Lee's approximately 13,000 North American Fresh Bakery employees will transfer to Grupo Bimbo. The sale also includes 41 plants in the U.S. and approximately 4,800 bakery routes, as well as a small piece of foodservice bakery business, which is in the North American Foodservice business.