Mexican bakery giant Grupo Bimbo acquired Sara Lee‘s North American fresh bakery business for $959 million.
Grupo Bimbo was established in Mexico in 1945 by Lorenzo Servitje, Jaime A. Sendra, Jose T. Mata and Jaime Jorba. Today it is one of the most important baking companies in brand and trademark positioning, sales, and production volume around the world.
The bakery sale, expected to close early next year, means Bimbo gets the rights to the iconic Sara Lee name for fresh baked goods in the U.S., although Sara Lee keeps it for its other products, such as frozen desserts and deli meats.
Grupo Bimbo also is the marketer of Thomas’ English Muffins and Entenmann’s cakes.
The sale of the bakery business “was likely difficult for the company to swallow — giving up its namesake brand to another company,” analyst group Stifel Nicolaus wrote in a note to investors. But “this divestiture will be a good one for Sara Lee in the long run.”
The ad agency for Sara Lee bakery brands is Omnicom Group’s TBWA/Chiat/Day, Los Angeles, which also handles Sara Lee brands such as Jimmy Dean, Ballpark and Hillshire Farm. Sara Lee’s measured media spending on its bread and bakery products was $4.1 million in the first six months of the year, which is less than 20% of what it spent on all brands, according to Kantar Media.
Grupo Bimbo uses independent O’Leary and Partners, located in Newport Beach, Calif., as its agency for bread brands.
Bimbo spent $8.8 million marketing its brands in the U.S. in the first half of the year, including $4.8 million on its Arnold brand.
“At this point the relationships with the agencies remain unchanged,” said Sara Lee spokeswoman Alissa Bolton. David Margulies, a spokesman for Grupo Bimbo’s U.S. division, Bimbo Bakeries USA, said that “until the acquisition is approved, there are not going to be any changes other than would happen in the normal course of business.”
For Bimbo, the acquisition will grow its U.S presence from 34 bakeries and more than 7,000 sales routes to 75 bakeries and 13,000 routes, the company said.
The company pledged to invest more than $1 billion in the next five years to create an “efficient manufacturing and service platform.”