November 9/Downers Grove, Ill./London Stock Exchange Aggregated Regulatory News Service -- Sara Lee Corp. has signed an agreement to sell its North American Fresh Bakery business to Grupo Bimbo for $959 million. The transaction, which is subject to customary closing conditions and regulatory clearances, is anticipated to close during the first half of calendar year 2011.
"This strategic move will further enable Sara Lee to aggressively drive growth in our core coffee and protein categories, organically and through acquisitions," said Marcel Smits, interim chief executive officer of Sara Lee Corp. "In addition to our $2.5 to $3.0 billion share repurchase program, last week's dividend increase and our strong stock price performance over the past year, this is the another example of Sara Lee pursuing shareholder value."
Per a press release, both Sara Lee and Grupo Bimbo are committed to further developing the strong brand equity that has been built up in the Sara Lee name over many decades. As a part of this transaction, Sara Lee will retain the right to sell Sara Lee branded frozen desserts and protein products, like sliced deli meats. Grupo Bimbo will have the rights to the Sara Lee brand in the fresh baked goods category globally, with the exception of Western Europe, Australia and New Zealand.
"We're very proud of all that our Fresh Bakery employees have achieved over the years. We created a great brand in the U.S. fresh bakery category, while establishing a strong reputation as a category captain and a superior customer partner," added CJ Fraleigh, chief executive officer, Sara Lee North America. "This transaction will allow the combined Grupo Bimbo and Sara Lee Bakery business to focus on the fresh bakery category and winning in the marketplace. With the majority of our associates dedicated solely to our coffee and protein businesses, we are focused on driving growth in these core categories while continuing to strengthen our heritage frozen dessert business."
In addition to the national fresh bakery brand Sara Lee, the acquisition provides Grupo Bimbo with a collection of leading regional bakery brands, such as Grandma Sycamore's, Heiner's and Rainbo. As part of the transaction, all of Sara Lee's approximately 13,000 North American Fresh Bakery employees will transfer to Grupo Bimbo. The sale also includes 41 plants in the U.S. and approximately 4,700 bakery routes, as well as a small piece of foodservice bakery business, which is in the North American Foodservice business. In the 12 months ended October 2, 2010, the North American Fresh Bakery business generated $2.1 billion in adjusted net sales and $38 million in adjusted operating segment income.
From the November 29, 2010, Prepared Foods E-dition