In a statement, Grupo Bimbo said the deal advanced the company’s “global growth strategy”, which will extend its presence in Canada and the UK. It is also hoped it will expand its distribution networks in the USA.
To fund the purchase, Grupo Bimbo will “utilise cash holdings and financing available under existing long-term committed credit facilities”, it said.
The arrangement, which has been approved by the boards of directors of Canada Bread and Grupo Bimbo, will require the approval of at least 66% of the votes cast by the shareholders of Canada Bread, at a meeting expected to take place in early April 2014.
Daniel Servitje, chairman and CEO, Grupo Bimbo, said: “We are very pleased to announce the acquisition of Canada Bread by Grupo Bimbo, given it is a company with a strong commercial presence, recognised by customers and consumers for its products’ high quality in the different bread categories.”
Richard Ian, president and CEO of Canada Bread, added: “This is an excellent outcome for our bakery businesses and shareholders. Becoming part of Grupo Bimbo, the world’s leading bakery company and benefiting from its focus, expertise and resources, will create new opportunities for our people, customers and business partners.”
In October last year, Maple Leaf revealed it was in talks to sell its 90% interest in Canada Bread.
Canada Bread manufactures flour-based products, including fresh bread, rolls, bagels and sweet goods, frozen partially-baked or par-baked breads and bagels, and speciality pasta and sauces. Its frozen arm includes UK business Maple Leaf Bakery UK.