(Updates with divestitures in fourth paragraph.)
Oct. 21 (Bloomberg) -- Grupo Bimbo SAB, the world’s largest breadmaker, can buy Sara Lee Corp.’s North American fresh bakery business if it agrees to sell some Sara Lee brands of sliced bread, the U.S. said.
Under a proposed settlement, which also cut the acquisition price to $709 million from $959 million, Mexico City-based Grupo Bimbo and its U.S. baking unit, BBU Inc., must divest the rights to sell certain Sara Lee brands in eight markets, according to a statement today from the Justice Department.
“BBU and Sara Lee’s North American fresh bakery business aggressively compete head-to-head for sliced fresh bread sold in retail stores,” said Sharis Pozen, the acting assistant attorney general in charge of the Justice Department’s Antitrust Division.
Bimbo and Horsham, Pennsylvania-based BBU agreed to sell brands including Sara Lee’s EarthGrains label in California, Kansas, Oklahoma and Nebraska, along with the Holsum and Milano brands in central Pennsylvania, the Justice Department said.
Without the divestitures, the acquisition “would likely lead to millions of Americans paying higher prices for sliced fresh bread,” Pozen said. The sales include the associated manufacturing, distribution and marketing assets required to compete effectively, according to the statement.
Monica Breton, a spokeswoman for Bimbo, didn’t immediately return a voice-mail message seeking comment.
BBU and Sara Lee are respectively the largest and third- largest bakers and sellers of sliced fresh bread in the U.S., the Justice Department said in the statement. BBU sells baked goods under brands including Arnold, Thomas’, Entenmann’s, Freihofer’s and Stroehmann’s.
Grupo Bimbo is expanding through acquisitions in the U.S. and Europe, where it bought Sara Lee’s bakery units in Spain and Portugal Oct. 10.
--With assistance by Carlos M. Rodriguez in Mexico City, Matthew Boyle in New York and Vivek Shankar in San Francisco. Editors: Andrew Dunn, Glenn Holdcraft
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