Wednesday, May 21, 2014

News: Bagel buyout to conclude this week

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The £1 billion deal struck by Mexico's Grupo Bimbo to take over Canada Bread, the company owned by Maple Leaf Foods, is set to close this Friday. The deal includes the largest bagel production facility in Europe, based at Swinton in Rotherham.

Announced in February, the deal has been approved by shareholders and has now received the necessary clearance under governance and competition laws - the Competition Act (Canada), the Investment Canada Act and the Hart-Scott-Rodino Act (USA).

The transaction is expected to close on May 23 when Maple Leaf will realise aggregate cash proceeds of $1.65 billion or $72.00 per share for its 90% ownership of the outstanding shares of Canada Bread, plus an interest dividend of $0.437 per share if the transaction closes as expected on May 23.

Grupo Bimbo said that the deal would advance its global growth strategy allowing it to extend the company's presence in Canada and United Kingdom, as well as to expand their distribution networks in the United States. Maple Leaf is expected to shift focus to its position as Canada's leading consumer packaged meats company.

To fund the transaction, Grupo Bimbo will utilise cash holdings and financing available under existing long-term committed credit facilities.

Michael H. McCain, president and CEO of Maple Leaf, said: "We are very pleased that his transaction has satisfied all regulatory reviews. The sale to Grupo Bimbo will provide an exciting future for our bakery business and enable Maple Leaf to focus on accelerating profitable growth in the consumer packaged meats business, supported by leading brands, market shares and significant financial strength."

Canada Bread dates back to 1911, when it was formed in a merger of five different companies. In 1991 the merger of Maple Leaf Mills Limited and Canada Packers Inc. created the company now known as Maple Leaf Foods Inc., Canada's largest food processor. Four years later McCain Capital Corporation and the Ontario Teachers Pension Plan Board acquired controlling interest in the company from Hillsdown Holdings plc and remain controlling shareholders today.

Established in 1945, Grupo Bimbo is the largest Mexican-owned baking company. In 2011 it became the largest baking company in the world when it acquired Sara Lee North American Fresh Bakery, Fargo in Argentina and Bimbo Iberia in Spain and Portugal. It employs 126,000 staff across 19 countries in America, Asia and Europe.

Based at Swinton, the bagel production facility employs around 300 staff and produces 6-7 million bagels per week for several companies including the New York Bakery Co. The Canadian parent company announced an £11.5m investment in a new production line in 2013 in response to the unprecedented success of the 2013 New York Bakery Co. bagel re-launch - which saw sales increase by 30%.

New York Bakery Co. website

Images: New York Bakery Co. / Facebook

2 comments:

Anonymous,  May 21, 2014 at 6:34 PM  

Go on Tom, alliterative headline opportunity: Bimbo bags big bagel buyout or Bagal bonanza in Bimbo buyout. You know you want to!

Anonymous,  May 22, 2014 at 7:49 AM  

Mexican Bimbo spends billions on bagels.

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