Grupo Bimbo Acquires Canada Bread
Maple Leaf Foods Inc., Canada, announced that Grupo Bimbo, S.A.B. de C.V. of Mexico agreed to acquire all of the issued and outstanding common shares of Canada Bread Co. Ltd. for aggregate cash proceeds of $1.83 billion or $72 per share pursuant to an arrangement agreement entered into between Canada Bread and Grupo Bimbo. Maple Leaf currently holds approximately 90% of the outstanding shares of Canada Bread and agreed to vote all of such shares in favor of the transaction.
"This transaction maximizes the value of our investment in Canada Bread and focuses Maple Leaf on building its leadership in the consumer packaged meats business," says Michael McCain, president and CEO. "Grupo Bimbo is an excellent company with strong values and a global leadership position with little overlap in our geographic markets. This makes for a highly complementary fit with our bakery operations, and is expected to provide exciting opportunities for Canada Bread employees, customers and other business partners."
"Upon completion of our prepared meats strategy at the end of 2014, Maple Leaf intends to capitalize on its state-of-the-art network, market-leading brands and a strong balance sheet to build on our position as Canada's leading consumer packaged meats company, both within and beyond our borders," McCain adds.
Maple Leaf is in the final phase of implementing a strategy to significantly increase productivity and profitability in its prepared meats business through establishing a low-cost, highly efficient manufacturing and distribution network. The company entered the peak phase of completing this strategy. Coupled with poor protein market conditions, this network transition significantly impacted earnings in 2013 and particularly in the fourth quarter. Once execution of this strategy is completed, involving closing down six older facilities, Maple Leaf expects to realize significant benefits from increased productivity and lower overhead and operating costs.