Mexico’s Bimbo buys U.S. bread business

Grupo Bimbo, the Mexican producer of Entenmann’s cakes and Oroweat loaves, said Wednesday that it agreed to buy the U.S. baked-good unit of Canada’s George Weston Ltd. for $2.4 billion as part of its plan to become the world’s largest bread maker.

Grupo Bimbo will gain the Arnold, Boboli, Brownberry and Thomas brands, which had sales of $2.2 billion this year through Oct. 4, the company said. The unit of Weston Foods Inc., which operates in the U.S., has more than 8,000 employees, 22 plants and 4,000 distribution routes.

Bimbo has spent more than $200 million this year buying companies in Latin America and China to reduce its dependence on the Mexican market. The company became the largest bread maker in Brazil this year after buying 75% of Nutrella Alimentos, and Chief Executive Daniel Servitje has said he aims to become the world’s largest bread maker within two years.

“This is the most important transaction in the history of Grupo Bimbo, and one of the largest in the history of baking,” Servitje said.

Mexico accounted for 67% of Grupo Bimbo’s third-quarter sales of $1.4 billion and the U.S. brought in 22%. The company makes Tia Rosa tortillas, Entenmann’s cakes, Pan Bimbo and Mrs. Baird’s breads.