Grupo Bimbo, the Mexican parent of Mrs Baird’s in Fort Worth as well as Sara Lee products, has agreed to acquire Canada Bread, the Canadian baked-goods business of Maple Leaf Foods, for about $1.66 billion.
The deal is Bimbo’s biggest since its $2.5 billion acquisition of George Weston Ltd.’s U.S. operations in 2009, which added the Oroweat and Entenmann’s brands, according to data compiled by Bloomberg. Buying Canada Bread will strengthen the company’s presence in the Americas, executives said.
“Canada Bread brings experience in the frozen bakery business that really enables us to expand our North American offerings,” Chief Executive Officer Daniel Servitje said during a conference call. “We see the Canadian bread market as a very compelling opportunity.”
Canada Bread makes fresh and frozen flour-based goods and sells them through brands including Dempster’s and Olafson’s, according to the company website. The combined company will have about $15 billion in revenue, with most of its sales coming from North America.
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Grupo Bimbo has been expanding aggressively in North America since its Bimbo Bakeries USA, now based in Horsham, Pa., was formed with the 1998 acquisition of family-owned Mrs Baird’s Bakeries in Fort Worth.
In North Texas, Bimbo Bakeries operates a bread plant and a regional office in Fort Worth, a tortilla factory in Grand Prairie and a bakery in Rockwall.
Grupo Bimbo, based in Mexico City, has 148 plants and operates in 19 countries. Last year, the company won an auction to buy the Beefsteak bread brand from bankrupt Hostess Brands. And in 2011, it agreed to acquire Sara Lee’s North American bakeries for $675 million.
Bimbo generated $1.17 in net income from every $100 of sales at the end of 2012, down from $5.25 at the end of 2008, according to data compiled by Bloomberg.
Maple Leaf, which owns 90 percent of Canada Bread, is divesting assets to focus on its packaged-meats business. The Toronto-based company agreed to sell its animal-rendering business to Irving-based Darling International for about $645 million (in Canadian dollars) in August and announced the sale of its commercial turkey farms and hatchery operations last year.
The company drew bids for Canada Bread from Flowers Foods and several private equity firms, as well as Bimbo, people with knowledge of the matter said in November.
Staff writer Steve Kaskovich contributed to this report.