Weston expects Bestfoods deal to close by midsummer

“We have bought the best bakery in the industry,” said Galen Weston, the company’s chairman and controlling shareholder.

The Globe and Mail
May 10, 2001

Weston expects Bestfoods deal to close by midsummer
Oliver Bertin

George Weston Ltd. says it is on track to close its Bestfoods Baking Co. purchase by midsummer, a $2.7-billion deal that will transform the giant food-processing and grocery chain.

In a few years’ time, said president Richard Currie, George Weston’s profit from baking will equal the earnings of its Loblaws Cos. Inc. supermarket empire. “And Loblaw is not slowing down,” he said.

Loblaw earned more than four times that of all the food-processing divisions combined in 2000 – nearly $1-billion in operating profit.

Company executives are clearly excited about the prospect of acquiring Bestfoods from Anglo-Dutch consortium Unilever NV, a purchase that would make Toronto-based Weston one of the biggest and most efficient bakeries in North America.

“We have bought the best bakery in the industry,” said Galen Weston, the company’s chairman and controlling shareholder.

The Bestfoods deal is before the U.S. Federal Trade Commission. But Mr. Currie said he was confident that Weston would receive full regulatory approval on schedule by midyear.

Weston is so keen on Bestfoods that it is shedding its dairy and fish-processing divisions to finance the deal. It is also considering the sale of 5 per cent of Loblaw shares, a move that Mr. Currie said would raise cash and improve the supermarket’s liquidity.

Mr. Weston said the dairy and fish-processing operations are being sold at a very good time, as they are performing exceptionally well. Mr. Currie added after the meeting that analysts have valued the two operations at between $600-million and $70-million.


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