Twinkie lovers can relax once they get over the rather shocking news: the tasty American classic will not disappear and may soon become Mexican.
Forbes is reporting that Mexico’s Grupo Bimbo, the world's largest bread-baking firm, is on the short list for acquiring parts of Hostess Brands Inc., baker of Twinkies and other popular snacks like Ding Dongs and Ho Ho's, as well Wonder Bread. Bimbo isn’t new to the U.S. market; it owns parts of Sara Lee, Entenmann’s and Thomas’ English Muffins.
Other firms that could be in the running include ConAgra and Flowers Food, the American company behind Nature Valley granola, as well as McKee Foods, baker of Little Debbie snack cakes, the Christian Science Monitor reported.
Saddled with costs related to its unionized workforce, Irving, Texas-based Hostess filed for Chapter 11 bankruptcy protection in January for the second time in less than a decade. Its predecessor company, Interstate Bakeries, sought bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.
According to Forbes, Bimbo put in a low-ball bid of $580 million a few years ago. But Hostess may turn out to be a steal with a reported worth of $135 million today.
Hostess will be in a New York bankruptcy courtroom on Monday to start the process of selling itself.
The company came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling. Then last week thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer. The bakers union represents about 30 percent of the company's workforce.
By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.
The company filed a motion to liquidate Friday. The shuttering means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.
News of the decision caused a run on Hostess snacks at many stores around the country, and the snacks started appearing on the Internet at inflated prices.
Based on reporting by The Associated Press.
Read more: http://latino.foxnews.com/latino/ne...ay-be-saved-by-mexican-company/#ixzz2ChMZJFEC
Forbes is reporting that Mexico’s Grupo Bimbo, the world's largest bread-baking firm, is on the short list for acquiring parts of Hostess Brands Inc., baker of Twinkies and other popular snacks like Ding Dongs and Ho Ho's, as well Wonder Bread. Bimbo isn’t new to the U.S. market; it owns parts of Sara Lee, Entenmann’s and Thomas’ English Muffins.
Other firms that could be in the running include ConAgra and Flowers Food, the American company behind Nature Valley granola, as well as McKee Foods, baker of Little Debbie snack cakes, the Christian Science Monitor reported.
Saddled with costs related to its unionized workforce, Irving, Texas-based Hostess filed for Chapter 11 bankruptcy protection in January for the second time in less than a decade. Its predecessor company, Interstate Bakeries, sought bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.
According to Forbes, Bimbo put in a low-ball bid of $580 million a few years ago. But Hostess may turn out to be a steal with a reported worth of $135 million today.
Hostess will be in a New York bankruptcy courtroom on Monday to start the process of selling itself.
The company came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling. Then last week thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer. The bakers union represents about 30 percent of the company's workforce.
By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.
The company filed a motion to liquidate Friday. The shuttering means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.
News of the decision caused a run on Hostess snacks at many stores around the country, and the snacks started appearing on the Internet at inflated prices.
Based on reporting by The Associated Press.
Read more: http://latino.foxnews.com/latino/ne...ay-be-saved-by-mexican-company/#ixzz2ChMZJFEC
[h=1]Next Twinkie Maker: Will A Mexican Billionaire Family Buy Hostess' Orphaned Brands?[/h]
Hostess sweets have tempted the sugar-starved among us for more than eight decades. Now, the company is going out of business. That moves the focus on Hostess’ brands—Twinkies, Devil Dogs, Wonder Bread, Ho Ho’s, to name a few—from the store shelf to the auction block.
It seems quite plausible that the next Twinkie maker could be a Mexican company run by a billionaire family.
Meet Daniel Servitje Montull. He and his family are worth more than $4 billion by our tally. Servitje runs Grupo Bimbo, a publicly traded bakery concern that ranks as the world’s largest bread maker. (Seated close to Servitje is his uncle, Don Roberto, and his father, Lorenzo. Papa Servitje founded Bimbo with three others in 1954.) Daniel Servitje assumed control of Bimbo in 1997, setting the company on a course of rapid growth. This included a battle with Mexico‘s tortilla don; positioning white bread in Latin American markets; and careful management of Bimbo’s fleet of white delivery vans.
A period of substantial expansion—profits doubled and revenue more than tripled—that also included several flirtations with buying Hostess.
Acquisitions are at the very center of Bimbo. Indeed, Bimbo has gobbled up companies, and this was initially confined to South America. Servitje, a thin man with deeply set eyes, worked to extend Bimbo’s reach from Mexico to the tip of South America, in Patagonia. Thereafter, his attention turned north. He bought Mrs. Baird’s Bakeries of Fort Worth, Texas for $200 million shortly before 2000, then Heiner’s and Earth Grains. And just last year, Bimbo bought the U.S. bakery business of Sara Lee Co. for $709 million, as well as the Spanish and Portugal portions in a separate transaction.
Today, Bimbo is a $10 billion sales business with $200 million in cash on its balance sheet. By contrast, Bimbo posted $3 billion in sales a decade ago; annual profits have more than doubled to roughly $400 million. It competes with U.S. companies like Kellogg, Hershey and General Mills, and with privately held operations such as McKee Foods, the maker of Little Debbie’s snacks. (Other Hostess suitors include Flowers Food, the company behind Nature’s Own, according to SunTrust.) Supermarkets stock Bimbo staples like Entenmann’s and Thomas’ English muffins. And, significantly, the Sara Lee acquisition suggests that Bimbo’s appetite for U.S. bakeries is hardly satiated.
So, perhaps Twinkies will take their place in Bimbo’s white vans. (A FORBES email to a Grupo Bimbo spokesman was not immediately returned.) Bimbo tried once before to seize Hostess. It teamed up with a Hostess union and an U.S. investment firm, billionaire Ron Burkle’s Yucaipa, to form a competing bid during Hostess’ first trip through bankruptcy in 2007. That eventually fell apart. Bimbo backed out, and Yucaipa went ahead and entered a fruitless offer, valuing Hostess at $580 million. Hostess’ business has gone staler since, the product of unfunded legacy pensions, leverage and labor strikes.
But even before 2007, Bimbo seemed sweet on Hostess. In the early 2000s, analysts widely speculated that Bimbo thought Hostess a key ingredient for North American expansion with delivery routes that penetrated across the country into convenience stores, gas stations and grocery markets. Bimbo publicly stated that it was shopping in 2000, and analysts widely speculated that Interstate Bakeries—the Hostess parent then facing three straight years of losses—would fall to Bimbo.
Today, with a taste still for American companies, Bimbo may just bite.
Reach Abram Brown at abrown@forbes.com.