Bimbo subsidiary Canada Bread Company Ltd will pay C$120 million ($103.38 million) for Montreal-based Saputo’s bakery, subject to conditions, including the approval of Canada’s Competition Bureau, Saputo said on Thursday.
The business includes one manufacturing facility in the Canadian province of Quebec, where it mostly makes snack cakes. Saputo’s main business is dairy.
In February, Grupo Bimbo agreed to buy Canada Bread from Maple Leaf Foods (MFI.TO) for C$1.83 billion. The other dominant Canadian baker is George Weston Ltd (WN.TO), parent of the Loblaw Cos Ltd (L.TO) grocery chain.
Bimbo said it expects its new acquisition to generate annual sales of more than C$130 million ($111.87 million) and that it expects to close the deal by the first quarter of 2015. The division earned C$139 million in revenue in fiscal 2014, representing less than 2 percent of Saputo’s consolidated revenues.
Saputo said it is the largest maker of snack cakes in Canada, and also has modest sales in the United States. Its snack cake brands include Jos Louis and Passion Flakie.
Canada’s Competition Bureau conducts reviews confidentially and cannot confirm whether it will examine the Saputo deal, spokeswoman Melanie Beauchesne said. The bureau generally must receive advance notice of proposed transactions when assets in Canada, or revenues of the target firm generated in Canada, exceed C$82 million, she said.
Saputo shares eased 7 Canadian cents or 0.2 percent to C$32.60 in early trading in Toronto. Grupo Bimbo stock gained 2.5 percent in Mexico City.
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