TORONTO – The purchase of Canada Bread Co. (CBY:TSX) by Mexico’s Grupo Bimbo has received approval under the Investment Canada Act, removing the final obstacle to the $1.83-billion deal, the two companies announced Tuesday.
The Investment Canada Act requires such large takeovers be of net benefit to Canada and approval under it followed an earlier green light under the Competition Act as well as a shareholder vote.
The deal now is expected to close on May 23.
Maple Leaf Foods (TSX:MFI) announced back in February that it had agreed to sell its 90 per cent stake in Canada Bread to the Mexican company, which is one of the world’s largest bread companies.
Canada Bread makes and markets bread, rolls, bagels and frozen partially baked or par-baked breads and bagels, employing some 5,400 people at its bakery operations throughout Canada and in the United States and the United Kingdom.
Grupo Bimbo, with 123,000 employees, has 144 plants and more than 1,600 distribution centres in 19 countries throughout the Americas, Europe and Asia.
Maple Leaf Foods, which is primarily focused on its meat products business, is in the midst selling a number of assets as part of a restructuring plan aimed at improving overall profits.