MONTREAL -- Canada Bread Co. has agreed to pay $120 million in cash to buy Saputo Inc.'s bakery division, Vachon, which makes Jos. Louis and May West snack cakes.
Montreal-based Saputo is primarily a cheese and dairy company, with operations throughout Canada, the United States and outside of North America.
There are 642 people working at Saputo's bakery in Montreal.
The division generated $139 million in revenues during fiscal 2014, less than two per cent of Saputo's consolidated revenues.
Spokeswoman Sylvia Sicuso said Canada Bread intends to continue operating Saputo's Quebec bakery facility, which employs 642 people.
"The business will run as an independent business unit of Canada Bread," Sicuso said.
"Nothing will change. It will continue to operate as it does today."
Canada Bread is a former subsidiary of Maple Leaf Foods now owned by Grupo Bimbo S.A.B of Mexico.
In a statement, Grupo Bimbo said the deal "will position Canada Bread for further growth in the country, complementing its current product portfolio and its distribution and manufacturing footprint."
The deal is expected to close in February, subject to approval from the Competition Bureau.
