Mexico's Grupo Bimbo to buy Canada Bread Co for $1.66 bn

Mexico's Grupo Bimbo, one of the world's largest bakers, yesterday said it is acquiring Ontario-based Canada Bread Company from Maple Leaf Foods for C$1.83 billion ($1.66 billion) in cash.

Grupo Bimbo, will pay C$72 a share, a 7 per cent premium to Canada Bread's closing price on the Toronto Stock Exchange on 11 February, making the acquisition the family-owned company's largest purchase since it bought Sara Lee's North American bread business for $959 million in 2010.

Grupo Bimbo, said it will finance the purchase with cash and by using long-term credit lines that it already has in place.

The acquisition is the latest in Grupo Bimbo's US deals to strengthens its position as among North America's top bakeries. In February 2013 it acquired Hostess Brands' Beefsteak bread in an auction.

Canadian food processing company Maple Leaf, which holds 90 per cent stake in Canada Bread, had last year said that it was exploring strategic alternatives, including a sale of its stake, and  expected to conclude a deal in early 2014 (See: Maple Leaf launches auction of Canada Bread) as part of a long-term restructuring  to focus on its meat business.

Maple Leaf has been selling parts of its businesses in an attempt to

Toronto Stock Exchange-listed Canada Bread is a leading manufacturer of value-added flour-based products, including fresh bread, rolls, bagels and frozen partially baked or par-baked breads and bagels.

The Ontario-based company markets products under a number of leading brand names, including Dempster's, Olafson's, POM, Ben's and Olivieri.

It employs around 5,400 people at its bakery operations throughout Canada, the US and the UK.

Mexico City-based Grupo Bimbo is one of the largest baking companies in the world in terms of production and sales volume.

The Mexican Stock Exchange-listed company is the market leader in the Americas, and has 144 plants and more than 1,600 distribution centers located in 19 countries throughout the Americas, Europe and Asia.

Its main product lines include sliced bread, buns, cookies, snack cakes, English muffins, bagels, pre-packaged foods, tortillas, salted snacks and confectionery products, among others.

Grupo Bimbo produces over 10,000 products and has one of the most extensive direct distribution networks in the world, and employs around 126,000 people.

It has recently been expanding its footprint overseas and had in 2010 acquired Sara Lee's North American bakery business for $959 million and Hostess Brands' Beefsteak bread in 2013.