Saputo Inc. on Dec. 18 revealed an agreement to sell its Canadian bakery division to Canada Bread Co. Ltd., a subsidiary of Mexico's Grupo Bimbo S.A.B. de C.V.
The selling price of $120 million on a debt-free basis is payable in cash at closing. The transaction is subject to the usual conditions, including approval by the Canadian Competition Bureau, and is expected to close in February 2015.
The bakery division makes primarily snack cakes and primarily in Canada, which are sold almost exclusively in the retail market. With sales of C$139 million, it claims to be the largest manufacturer of snack cakes in Canada and also sells on a small scale in the U.S.
The unit operates one manufacturing facility in the province of Québec and employs 642. Saputo's main business is dairy products.
Canada Bread Co., headquartered in Etobicoke, Ontario, focuses on fresh bread and bakery products. It operates 16 bakeries, employs approximately 3,800 people across Canada, and serves major grocery chains, retail outlets and foodservice operations. Canada Bread was bought by Grupo Bimbo, the world's largest baker, in February 2014 for C$1.83 billion. Seller was Maple Leaf Foods.