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Mexico: buying businesses abroad

Tuesday, February 18, 2014


The $1.6 billion purchase this month by Grupo Bimbo of Canada Bread Company, a division of Toronto-based Maple Leaf Foods, is the latest in a program of expansion by Mexican companies in other countries.

Mexico last year came second in Latin America in acquisitions of foreign businesses, with nearly a quarter of the total.

In 2012, Mexican companies were number one.

Many of these transactions are in the food and beverage sectors.

A major 2013 deal involved the acquisition of Brazilian beverage company Spaipa for $1.85 billion by Femsa, the world’s biggest independent Coca-Cola bottler.

For its part, Sigma, a subsidiary of Grupo Alfa, last December bought Spanish food company Campofrio for just under $1 billion.

Also in the food sector, Gruma in late 2012 paid $450 million for the 23 percent stake in the company held by United States-based Archer Daniels Midland.

Meanwhile, chemical firm Mexichem last June spent $250 million to acquire Ohio-based PolyOne Corporation.

The purchase includes two production plants and a research center in the United States.

The Canadian acquisition by Grupo Bimbo, based in Mexico City, will strengthen the company’s presence in North America.

The largest baking company in the United States, Bimbo has an extensive line of products, which include Arnold’s Bread and Entenmann’s pastries, along with the rights to the Sara Lee brand, except for Western Europe, Australia and New Zealand, Grupo Bimbo had 2012 revenues of $13 billion, with 152 plants throughout Latin America, as well as China, Spain and Portugal.

The company entered the U.S. market in 1996, when it acquired Pacific Pride Bakeries.