TORONTO - Mexico's Grupo Bimbo will buy Canada Bread Company for $1.83 billion in cash, allowing the Canadian company's parent Maple Leaf Foods to focus on its meat products business, Canada Bread said on Wednesday.
Grupo Bimbo, one of the world's largest bread makers, will pay $72 a share for each share of Canada Bread, a 7% premium to the Canadian company's closing price on the Toronto Stock Exchange on Tuesday.
Shares of Canada Bread have surged 22% since October, when Canadian food processor Maple Leaf said it was mulling the sale of its 90% stake.
The purchase builds on Grupo Bimbo's large U.S. acquisitions in recent years and strengthens its position as the top bread maker in North America.
Bimbo has expanded its footprint in recent years, acquiring Sara Lee Corp's North American bakery business for $959 million in 2010 and buying Hostess Brands Inc's Beefsteak bread brand last year.
In January, Reuters reported that Grupo Bimbo had emerged as the leading candidate to buy Canada Bread, after other parties including private equity firms KKR & Co and Bain Capital LLC, and U.S.-based Flowers Foods Inc, bowed out of the race.
Canada Bread is one of two dominant Canadian bakers, along with food producer George Weston Ltd, parent of the Loblaw Cos Ltd grocery chain. In addition to bread sold under the Dempster's brand, Canada Bread sells pasta and other products under banners such as Olivieri, Ben's, POM and Sunmaid.