UPDATE 1-Canada Bread agrees to sell pasta business to Spain's Ebro

Thu Oct 24, 2013 9:58am EDT
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TORONTO Oct 24 (Reuters) - Canada Bread Co, which is majority-owned by Maple Leaf Foods, said on Thursday it agreed to sell its Olivieri Foods fresh pasta and sauce business to Spanish food processing company Ebro Foods SA for about C$120 million ($115.5 million).

The move comes days after Canadian food processor Maple Leaf said it might sell its controlling stake in Canada Bread as it decides whether to exit the bakery goods business and focus on meat products.

Toronto-based Canada Bread said the deal, which is subject to regulatory approval, is expected to close by the end of 2013.

Olivieri Foods accounted for less than 10 percent of Canada Bread's revenue in 2012. The company also sells bread under the Dempsters brand and other food products under banners such as POM, Ben's and Sunmaid.

The Olivieri business, which employs some 375 people, makes flat and filled fresh pasta products and sauces at facilities in Hamilton, Ontario and Delta, British Columbia.

Canada Bread, which has a market capitalization of roughly C$1.78 billion, employs some 6,400 people in operations across Canada, the United States and Britain.

It is one of two dominant Canadian bakers, along with food producer George Weston Ltd, parent of the Loblaw Cos Ltd grocery chain.

Shares in Canada Bread rose 43 Canadian cents to C$69.00 in early trading on the Toronto Stock Exchange following the news on Thursday, while Maple Leaf shares rose 1.6 percent to C$15.57.