General Mills has agreed to sell its Argentina bakery and foodservice business to a Mexico-based baking company Grupo Bimbo for undisclosed sum.
However, General Mills will retain its growing retail food business in Argentina, including the La Salte a brand.
The sale agreement includes General Mills bakery and foodservice business along with facilities, equipment, land and inventory in Argentina, and employment contracts for production and salaried staff.
Grupo Bimbo plans to consolidate its presence in the South American market by acquiring General Mills' bakery and foodservice business, which will increase its supply in the frozen bread category.
The company sells products in the category under the he Bertrand brand and its portfolio includes products such as French baguettes and croissants.
The sale transaction is subject to regulatory approval. The agreement is expected to be formalized in May 2016.
Currently, General Mills bakery and foodservice employs around 360 people.
The company expects the sale to affect few jobs. General Mills Latin America president Sean Walker said: "Having assessed our performance in the current business environment, we have determined that we need to prioritize other growth opportunities within our Latin American portfolio."
General Mills has been operating the bakery and foodservice business in Argentina since 2001. It acquired that business as part of Pillsbury acquisition.
The Argentina bakery business' portfolio includes breads, pastries, small baked goods, and Medialunas, which is the Argentinean version of croissants.
Grupo Bimbo was established in Argentina in 1995. It owns five plants and offers a portfolio of products under emblematic local and global brands in the categories of bread loaves, buns, tortillas and sweet rolls, among others.
Image: General Mills offloads its Argentina bakery business. Photo: Courtesy of Paul/FreeDigitalPhotos.net.
