Loblaw Cos. parent George Weston Ltd. plans to sell its Weston Foods fresh and frozen bakery business to baked goods manufacturer FGF Brands Inc. for $1.2 billion (Canadian) in cash.
The deal, announced Tuesday, comes about six months after George Weston put Weston Foods on the sales block to better focus on its Loblaw retail and Choice Properties real estate businesses.
Serving retail and foodservice customers in Canada and the United States, Weston Foods makes packaged fresh bread and rolls as well as frozen and artisan bread and rolls, cakes, donuts, pies, cookies, crackers, wafers and alternatives. It also manufactures private-label products and a number of well-known brands, such as Wonder, ACE Bakery, Country Harvest, D’Italiano, Casa Mendosa, Dave's Killer Bread and Gadoua. Sales in 2020 totaled $2.1 billion (Canadian).
“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, chairman and CEO of George Weston Ltd., said in a statement. “However, we are pleased that the purchaser of the fresh and frozen businesses is FGF, another longstanding family business with a strong presence in bakery and a significant footprint in Canada. With FGF as the new owner, the business will be in good hands.”
Toronto-based George Weston noted that the fresh and frozen bakery business accounted for about 75% of Weston Foods’ 2020 net sales. The company said it continues to seek a buyer for its remaining ambient business, encompassing cookies, cones, crackers and wafers.
The companies aim to finalize the fresh and frozen bakery transaction before the end of the 2022 first quarter. They said expect a smooth transition for Weston Foods customers, management and employees to new owner FGF.
“We are thrilled to be acquiring the fresh and frozen businesses of Weston Foods, a Canadian company with over 100 years of baking experience,” stated FGF co-founder Tejus Ajmera. “We look forward to building on that legacy by investing in people, facilities and innovation across our entire operations, in collaboration with Weston Foods President Luc Mongeau and his team.”
Founded in 2004, Toronto-based FGF Brands describes itself as a “technology company that bakes. The company said it combines robotics, artificial intelligence systems and supply chain solutions to make “quality food with the cleanest possible ingredients.” FGF operates in seven bakery categories and owns multiple brands, including Stonefire (naan bread and crisps, pizza crust and flatbreads), Simple Joys Bakery (muffins and sliced cake) and Santosh (vegetarian/vegan naan bread), made in bakery facilities across Canada and the United States.
“FGF remains a startup at heart, and this acquisition allows us to bring that same drive for disruption to more teams, brands and customers than ever before, as we pursue our vision to become the world's greatest baker,” commented FGF co-founder Ojus Ajmera.
After the sale to FGF, George Weston Ltd.’s current business units will include Loblaw Cos., the remaining operations of Weston Foods and Choice Properties, which owns, manages and develops commercial retail, industrial, office and residential properties across Canada. Loblaw’s retail network encompasses 2,442 stores, including 548 corporate-owned supermarkets under multiple banners, 548 franchised grocery stores and 1,346 Shoppers Drug Mart/Pharmaprix associate-owned drugstores. The company also provides the President’s Choice (grocery), no name (food and household products) and Life Brand (health and wellness) private labels; PC Financial services; Joe Fresh fashion and apparel brand; and the PC Optimum loyalty program.