Grupo Bimbo, an aggressive Mexican bakery company, might
emerge as a potential buyer for Canada Bread now that Maple Leaf Foods Inc.
says selling the business is among the options it’s considering.
Bimbo is a low-profile, but significant, player in the
Canadian market, operating out of offices at Cambridge.
It has cookie companies and bought the fresh bread business
from Sara Lee in 2011 and the fresh bread business in the United States from
Weston Bakery in 2008.
Weston and Canada Bread dominate the bread business in
Canada.
Maple Leaf built and opened a $100-million plant in Hamilton
in 2011, consolidating operations from several smaller and older plants in
Ontario.
Now it’s investing $575 million to centralize meat-processing
at another plant in Hamilton that’s due to be fully operating next year.
There is speculation in the Toronto business news media that
Canada Bread might be bought by private equity firms.
There is also speculation that if and when Canada Bread is
sold, foreigners will make aggressive bids for Maple Leaf because it will be
only operating as a meat company.
Among potential bidders for the meat business are JBS of
Brazil, which bought XL Foods Inc. of Brooks, Alta., last year, Shuanghui
International of China which is buying Smithfield Foods Inc. for $4.7 billlion
and Cargill, which already owns Better Beef at Guelph and poultry processing
plants in the province.
Michael McCain, the president and chief executive officer,
holds 33 per cent of Maple Leaf’s shares.
Greg Boland and his West Face Capital hold 11.35 per cent.
Boland pressured Maple Leaf to improve its operations for
shareholders and won a battle to oust some directors from the board and now
sits on the board. He also advocated selling the bakery division, but McCain
rejected that idea in 2010.
Maple Leaf sold its turkey farms and hatchery in August for
about $200 million and its Rothsay rendering business in September for $645
million.
