Blog: Dean BestBimbo bets big on US bread

Dean Best | 11 December 2008

The boss of Mexican baking giant Grupo Bimbo may think the company's US$2.5bn acquisition of the US fresh bakery business of Canada's George Weston is the best think since sliced bread but not all industry watchers are as convinced about the deal.

Bimbo shares fell 3.4% yesterday (10 December) after the deal was announced, with the way the transaction has been financed cited as a possible reason for the drop in the company's share price.

Bimbo has taken on $2.3bn of debt from a group of six banks, a move that could be seen as risky in the current financial climate.

However, Bimbo is betting that the bread sector will prove far more resilient than others that have been hit by the economic turmoil and sees its moves to expand its US business as a vital step to creating one of the leading companies in the sector.

“This transaction is the most important one in Grupo Bimbo’s history and one of the largest in the bread industry,” said CEO Daniel Servitje. “Size alone, however, is not our main objective. Rather, our vision is to become the best baking company.”

The Weston deal gives Bimbo a nationwide presence in the US. Bimbos' shareholders will be hoping the larger business proves not too difficult to digest.


BLOG

Barilla puts sustainability centre stage

Barilla's 2016 results statement, published last week, makes interesting reading, not because of the Italian food group's commercial performance, but for the emphasis placed on sustainability achievem...

BLOG

UK M&A deal volumes slide in early months of 2017

Fresh data from Grant Thornton indicates the number of mergers and acquisitions in the UK food and drink sector fell to the lowest level for over two years in the first quarter of in 2017 - but the ac...

BLOG

Food policy returns to focus in Westminster

Amid the political turmoil in the UK caused by the EU Referendum, the resignation of a Prime Minister, subsequent burning debates over the Brexit “divorce” settlement and now by the surprise announcem...

BLOG

Danone closes WhiteWave, who will acquire Stonyfield?

Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...

just-food homepage



Forgot your password?