Flowers Foods gains approval to acquire certain Hostess bread brands

US-based producer of packaged bakery goods Flowers Foods has secured regulatory approval to acquire certain bread brands and assets of Old HB, formerly known as Hostess Brands, for $360m.

The deal, which received regulatory approval pursuant to the Hart-Scott-Rodino Act, includes acquisition of Wonder, Nature’s Pride, Merita, Home Pride and Butternut bread brands, as well as 20 bakeries and 36 depots.

The transaction is expected to be completed in the coming weeks.

In February 2013, Flowers Foods announced that its bid to acquire certain Hostess Brands’ assets for $360m was declared as the highest bid for such assets.

Flowers Foods then stated that the acquisition is in line with the company’s long-term growth objective to reach more of the US population with its fresh bakery products.

In March 2013, the court overseeing the Old HB bankruptcy case approved the sale.

Hostess Brands filed for bankruptcy in January 2012 for the second time in its history, declaring assets of $982m and debt of $1.43bn, as it was affected by soaring labour costs and the changing tastes of consumers.

In November 2012, Hostess received approval from the US Bankruptcy Court in New York to close its business and sell its assets.

Flowers Foods, headquartered in Georgia, operates 44 bakeries that produce a wide range of bakery products for retail and foodservice customers in the US, and it reported sales of $3.05bn in 2012.

Flower Foods has been seeking to strengthen its presence over the recent years; in October 2012, it entered into an agreement to acquire certain bakery assets and trademark licences from BBU, a subsidiary of Mexico-based Grupo Bimbo, for an undisclosed amount.

In April 2012, the company announced its plans to expand its baked foods facility in Oxford, Pennsylvania, with an investment of $31m.

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Image: The acquisition is in line with Flowers Foods’ long-term growth objective to reach more of the US population with its fresh bakery products. Photo courtesy of PRNewsFoto/Flowers Foods.