Sara Lee has completed the sale of its American Fresh Bakery business to Mexican firm Grupo Bimbo for $709m.
Illinois-headquartered Sara Lee has been selling off parts of its business as it prepares to split into two separate companies. It also said on Monday that it had agreed the sale of its fresh bakery businesses in Spain and Portugal – also to Grupo Bimbo – for €115m (about $157m). That transaction is expected to close by the end of the calendar year, the company said.
The completion the American Fresh Bakery business sale follows approval from the US Department of Justice late last month, and Bimbo Bakeries USA (BBU) said it would invest more than $1bn in manufacturing facilities and jobs across the United States over the next five years.
BBU president Gary Prince said: “These two great businesses will be better together, providing exceptional service to customers, value across our product portfolio for consumers and personal and professional development opportunities for our associates…We will build new bakeries where we need them, renew existing facilities and improve our technology and infrastructure.”
The transaction includes all of Sara Lee’s approximately 13,000 North American fresh bakery employees and 41 plants across the United States.
Sara Lee announced it would split into two separate businesses – and reject unsolicited buyout offers – back in January, ending months of speculation over the company’s future.
The company plans to give further details of the separation on February 29, but Sara Lee has said it intends to spin off the company’s North American retail and North American foodservice businesses – excluding beverage – into a new public company under the Sara Lee name, producing brands such as Sara Lee, Jimmy Dean, Ball Park, Hillshire Farm, Chef Pierre and State Fair. An as-yet-unnamed second company would comprise Sara Lee’s international beverage and bakery business, plus the company’s North American beverage business, with major brands including Douwe Egberts, Senseo, Pickwick, Maison du Café, L’OR, Café Pilão, Marcilla and Bimbo.
Sara Lee reported a loss of $215m in the first quarter of fiscal 2012 to October 1, compared with a profit of $194m a year earlier, citing a handful of one-off charges. It said it had managed to pass on higher prices to offset increased commodity costs in some instances, and sales were up 13% to $1.94bn.