Advertising of Mexican bread maker Grupo Bimbo is seen in a store in Mexico City, September 24, 2014. REUTERS/Edgard Garrido

The world's No. 1 breadmaker, Grupo Bimbo, just announced that its subsidiary Canada Bread Company reached an agreement to acquire Saputo Bakery in Canada for 120 million Canadian dollars (over $103MM). The Mexican baked goods group released a statement saying it expects the new subsidiary, Saputo Bakery, will generate over 130 million Canadian dollars (over $112MM) in the next year. In addition, they assure the acquisition will further establish Canada Bread’s position in the country’s market by expanding its product portfolio, distribution network and manufacturing footprint.

Before Bimbo bought Canada Bread, the company was the baking division of Maple Leaf Foods, which makes Dempster’s bread and other brands at 16 factories across Canada. On the other hand, Saputo Bakery was founded in the 1950s by the Saputo family, and is now the maker of brands such as Vachon’s Jos Louis, Passion Flakie, and May West snack cakes. It is the largest maker of snack cakes in Canada, and also has modest sales in the United States. The company, which has sales of about $10-billion a year, also makes several kinds of cheese, milk and dairy products. The Senior Vice-President of supply chain at Canada Bread, Jean Luc Breton, said the deal is in line with the company's plans to become more competitive by entering new food categories.

The Canada Competition Bureau keeps absolute confidentiality about the deals and mergers it looks into, as well as the numbers of approval. However, this deal was expected to be closed until February, but apparently was approved sooner than projected. Grupo Bimbo released a statement saying "the acquisition will position Canada Bread for further growth in the country, complementing its current product portfolio and its distribution and manufacturing footprint."

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