You’re going to have to get that pound cake from someone else.
Sara Lee is getting out of the bakery business, selling its North American Fresh Bakery unit to Mexican bakery giant Grupo Bimbo for $959 million.
The transaction, which includes 41 U.S. plants, lets Sara Lee keep the right to sell Sara Lee brand frozen desserts and meat products such as its Jimmy Dean sausages. The company said Tuesday that the sale will allow it to aggressively expand other businesses.
Grupo Bimbo will have rights to the Sara Lee brand in fresh baked goods globally, excluding Western Europe, Australia and New Zealand. About 13,000 employees will be transferred.
Grupo Bimbo, based in Mexico City, is the largest food company in Mexico and a major baker in the U.S. and Central America. Its 2009 revenue was $8.6 billion. Its brands include its namesake bread, Lara cookies and crackers, Arnold, Stroehmann, Entenmann's and Thomas' baked goods.
"When added to Bimbo Bakeries USA's facilities, Sara Lee's bakeries provide us with a strong national network, as Sara Lee has a significant presence in the Midwest and Southeast while Bimbo's base is in the Northeast and Texas," Bimbo Bakeries USA President Gary Prince said in a statement.
The deal gives Grupo Bimbo 41 additional plants in the U.S. and about 4,700 delivery routes. When the transaction closes, the company will have 75 bakeries in 31 states, more than 13,000 sales routes and more than 28,000 employees. Grupo Bimbo has 98 plants worldwide.
Grupo Bimbo said it will make a more than $1 billion investment in the U.S. over the next five years to add bakeries, enhance existing plants and improve its infrastructure and technology.
Sara Lee Corp.'s stock gained 20 cents to $15 in morning trading.
Based on reporting by The Associated Press.