The parent company for Canadian grocery and retail giant Loblaw is stepping the rest of the way out of the baked goods business.
George Weston Ltd. said Monday it has signed a deal to sell its Weston Foods “ambient” bakery business — which produces cookies and crackers, along with cones and wafers for ice cream novelties, for retail and foodservice customers in Canada and the U.S. — to Hearthside Food Solutions for $370 million.
“With the sale of the entire bakery business, George Weston will be focused on its market-leading retail and real estate businesses going forward,” George Weston’s CEO Galen Weston said in a release.
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The deal will give Hearthside an Ontario plant at Kitchener, plus five U.S. plants at North Sioux City, S.D., Front Royal, Va., Green Bay, Wisc., Somerset, Pa. and Columbus, Ohio, all of which combined currently have about 1,100 employees.
Chicago-based Hearthside is a contract producer of baked foods, snacks, nutrition bars and frozen, refrigerated and fresh sandwiches, entrees and meal kits as well as packaging services for food companies at 37 plants, mainly in the U.S. but also at Leerdam in the Netherlands.
Hearthside CEO Chuck Metzger, in a separate release, said the Weston deal gives it more baking capacity plus “a roster of premier customers, expanded capabilities and enhanced geographic coverage. These synergies benefit our current and new customers alike.”
Taken together with last month’s deal to sell Weston’s fresh and frozen bakery business to FGF Brands, the sale of George Weston’s entire bakery business is worth $1.57 billion to the company. Net proceeds from these deals are expected to be returned to stockholders through share repurchases, the company said.
“In the interim, the company is committed to ensuring that a smooth transition plan is in place as Weston Foods continues to support its customers and workforce,” the company said.
The move to sell the two bakery business lines follows $25 million in upgrades announced in January for three Weston plants — among them a new processing line producing mini ice cream cones at the Green Bay facility.
In all, Weston Foods’ bakery business was operating plants in eight provinces and 11 states before these two sales. George Weston had previously sold off its U.S. bread and baked goods business to Mexican baking giant Grupo Bimbo in 2009, and its Neilson Dairy business to Saputo in 2008.
“The Weston Foods business has been the foundation for the Weston Group in Canada since its establishment in 1882 and the decision to sell it was a difficult one,” Galen Weston said last month.
The sale of the ambient bakery business is subject to U.S. antritrust regulators’ approval and other conditions typical for such deals. George Weston said it expects to close its deal with Hearthside before the end of its first quarter in 2022. — Glacier FarmMedia Network
