US-based baking company Flower Foods has agreed to acquire certain bakery assets and trademark licenses from BBU, a subsidiary of Mexico-based Grupo Bimbo, for an undisclosed amount.
The deal has received clearance from the United States Department of Justice.
Under the agreement, Flower Foods will gain exclusive, perpetual, and royalty-free license to the Earthgrains as well as Sara Lee branded buns, rolls, and sliced breads in state of California, which together have estimated sales of approximately $134m per year.
The company will also receive exclusive, perpetual, and royalty-free for a wide range of Earthgrains branded fresh bakery products in the Oklahoma City market area in the state of Oklahoma.
The transaction will be closed in phases, with the Oklahoma City license expected to be completed shortly, and the first phase of California license likely to be completed in the first quarter of fiscal 2013.
Flowers Foods chairman and CEO George E Deese said that the deal expands the company's reach in California, adding nearly 14.7 million people to the 70% of the US population that can access its fresh breads and rolls.
"This moves us closer to our goal of reaching 75% of the US population through our direct-store-delivery system by 2016," Deese added.
Flowers Foods, headquartered in Georgia, US, operates 44 bakeries that produce a broad range of bakery products under brands such as Nature's Own, Tastykake, and Mrs. Freshley's, and it reported revenues of $2.8bn in 2011.
