Mexico’s Grupo Bimbo S.A.B. de C.V. has acquired Sara Lee’s North American Fresh Bakery business for $959MM.
The company’s otherwise hilarious name is pronounced BEEM-bow and not like the contemptuous putdown of a dumb blonde.
The Sara Lee unit had been on the block for some time as that company shifts its strategy away from its once-diversified structure. The move fits right in with Bimbo’s expanding further into the US market. That shift began when they acquired the U.S. assets of George Weston Bakeries in 2009. This new move gives U.S. subsidiary Bimbo Bakeries USA 75 baking plants in 31 states, and encompasses a national sales network of 13,000 DSD (direct store delivery) routes.
Sara Lee’s sales in 2009 were $3.9bn. Adding the Sara Lee business will push projected Bimbo sales to $6bn, more than two times the size of the second-largest baking company, Flowers Foods, Inc. ($2.6bn). Sara Lee says it intends to use the proceeds on its stock repurchase program, as well as focusing future growth in the coffee and protein categories, including acquisitions. The company has plans to divide itself into two entities, much like Kraft is planning. Bimbo’s expansion has taken it from a standing start to dominance of several baking sectors, though whispered concerns about over-expansion are beginning to swirl around the industry.
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