George Weston selling fresh and frozen bakery business for $1.2B

George Weston Ltd. has signed a deal to sell its Weston Foods fresh and frozen bakery businesses to FGF Brands Inc. for $1.2 billion.

The company put Weston Foods up for sale in March as part of a plan to focus on its retail and real estate businesses including its large stake in Loblaw Companies Ltd. and interest in Choice Properties Real Estate Investment Trust.

"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," chairman and CEO Galen G. Weston said in a statement Tuesday.

"However, we are pleased that the purchaser of the fresh and frozen businesses is FGF, another long-standing 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."

Weston Foods produces bread, rolls and other baked goods in Canada and the U.S.

The company makes private-label products and brands including Wonder, Ace Bakery and D'Italiano.

The fresh and frozen bakery businesses made up about 75% of Weston Foods' 2020 net sales.

George Weston said Tuesday it remained committed to selling its remaining food business-- comprised of cookies, cones, crackers and wafers.

FGF Brands is a Canadian, family-owned bakery company founded in 2004. Its brands include Stonefire Authentic Flatbreads and Simple Joys Bakery and has bakeries in Canada and the United States.

The sale is subject to regulatory approval and other closing conditions and is expected to close before the end of the first quarter of 2022.

The company said it expected to return the net proceeds from the sale to shareholders through share repurchases over time.