A Mexican company is buying Canada Bread — including a state of the art facility in Hamilton’s Red Hill Business Park.
Maple Leaf Foods announced the deal on Wednesday. It’s valued at $1.83 billion.
Grupo Bimbo is offering $72 per cash for all shares of Canada Bread, which is the maker of Dempsters and other brands.
That's about seven per cent above Canada Bread's recent stock price and 31 per cent higher than when it was put up for sale. Canada Bread and Maple Leaf said in October that they were looking for a buyer at the right price.
"This transaction maximizes the value of our investment in Canada Bread and focuses Maple Leaf on building its leadership in the consumer packaged meats business," said Michael H. McCain, president and CEO of Maple Leaf Foods. "Grupo Bimbo is an excellent company with strong values and a global leadership position, with little overlap in our geographic markets.
“This makes for a highly complementary fit with our bakery operations and is expected to provide exciting opportunities for Canada Bread employees, customers and other business partners."
Maple Leaf has touted the $100-million Canada bread facility in Hamilton as Canada’s largest bakery plant. It has been looking for a buyer for Canada Bread since last October.
Full operation at the plant started last year. It has over 300 full time workers.
Canada Bread shares jumped 4.9 per cent to $72.20 on Wednesday. Maple Leaf shares closed Tuesday at $15.84, up from $13.30 on Oct. 18, but dropped slightly on Wednesday to $15.70.
Grupo Bimbo, one of the world's largest bread companies, gains access to the Canadian market with popular brands like Dempsters and Bon Matin.
"The company fits exactly within our strategic soft spot as a leader in its domestic market," Grupo Bimbo chief executive Daniel Servitje said in a conference call.