The acquisition includes all the associated General Mills facilities, equipment, land and inventory in Argentina – in addition to employment contracts for production and salaried staff. The division employs about 360 people, and the company said it expects job impact to be minimal.
The operation’s product portfolio includes breads, pastries, small baked goods and medialunas, the Argentinian version of croissants.
Grupo Bimbo said the deal would enable it to continue consolidating its presence in the South American market, and would complement the supply of frozen bread it already manufactures under the Bertrand brand. Grupo Bimbo started operations in Argentina in 1995 and operates five plants producing lines including bread loaves, buns, tortillas and sweet rolls.
General Mills to continue selling chilled dough
General Mills, which took over the Argentinian bakery and foodservice business in 2001 as part of its Pillsbury acquisition, is to continue operating in the retail food business in Argentina through brands including La Salteña chilled dough.
“We would like to thank members of the Argentina bakery and foodservice team, who have performed well despite challenging conditions,” said Sean Walker, president of General Mills Latin America. “Having assessed our performance in the current business environment, we have determined that we need to prioritize other growth opportunities within our Latin American portfolio.”
General Mills expects to complete the transaction by May 2 2016.
Growth in Latin America sales
The company last month reported overall net sales fell 8% to $4bn in the third quarter, including a three percentage point decline as a result of the sale of Green Giant to B&G Foods. On a constant-currency basis, net sales fell 4%. Total operating profit fell 3% to $679m, and was down 1% in constant currency.
On a constant-currency basis, net sales from the Latin America division rose 16% year on year.
“Our third-quarter financial results were in line with our expectations,” said chairman and chief executive officer Ken Powell.