News briefs: Bakery acquisitions

By Laura Crowley

- Last updated on GMT

Related tags Mergers and acquisitions Kellogg company

This week, Flower Foods bakery continues its geographical expansion
plans with its acquisition of ButterKrust bakery, and Kellogg
acquires a major Chinese cookie company.

Another business deal aids expansion for Flower Foods ​ Flowers Foods, a producer and marketer of packaged bakery foods, will acquire ButterKrust Bakery to further expand its production in the US. ButterKrust is a privately-owned bakery in Lakeland, Florida, which sells fresh breads and rolls throughout the state under several brands, including store brands. George Deese, CEO and president for Flower Foods, said he hoped the acquisition will "bring additional production capacity to help our company better serve theFloridamarket". ​Flower Foods operates 36 US bakeries that produce breads, rolls, snack cakes and pastries, which are distributed both as fresh and frozen products. Holsum Bakery owns two bakeries in the Phoenix area. It currently has annual sales of over $2.02bn. This is the second major business move announced by the company in the space of just one week, having also agreed to merge with family-owned Holsum Bakery to increase its geographical reach. Holsum and Flower Foods said they hoped the merger would provide new possibilities for expansion, as well as allowing for an increased product range Deese said of the merger: "Holsum and Flowers have similar operating strategies and business ethics. This merger of Holsum and Flowers further strengthens our operations and brings new talent to our company. We look forward to the growth opportunities the merger will provide as we strategically expand our geographic footprint."​ In January, Flower Foods made an unusual financial move when it bought a Georgia-based manufacturing facility back from the Schwan Food Company, saying they had different plans for it. Kellogg's expands into high-growth markets ​ A Kellogg's majority-owned subsidiary has acquired the assets of Zhenghang Food Company (Navigable Foods), a manufacturer of cookies and crackers in China. The international cereals and convenience foods manufacturer said the business move will help it in its bid to achieve expansion in high-growth markets. The companies have not disclosed terms of the transaction, but Navigable Foods' 2007 net sales amounted to $50m. "Geographic expansion in high-growth markets likeChinawill help Kellogg Company continue to deliver sustainable growth,"​ said David Mackay, president and chief executive officer, Kellogg Company. "Navigable Foods' biscuit products are a strong, strategic fit within the Kellogg portfolio and will further build our presence inChina." ​The acquisition includes two manufacturing facilities as well as the company's sales and distribution network. Kellogg's products are manufactured in 18 countries and marketed in more than 180 countries around the world. The company's 2007 sales reached almost $12bn.

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