George Weston Ltd. (GWL) is putting its Weston Foods bakery business up for sale and doubling down on its core retail and real estate operations, the company said Tuesday.
The move comes after efforts to grow the Toronto-based bakery business through acquisitions came up short.
“We spent last year exploring opportunities to create a step change in Weston Food’s scale that would allow it to become a truly meaningful part of GWL value,” the company’s chairman and chief executive, Galen G. Weston, said during a conference call with analysts.
“But in the end, we did not find the right opportunity. Instead, it’s now clear that pursuing a sale represents the best way to unlock Weston Foods’ potential.”
The sale of the bakery business will leave George Weston with its majority stake in grocery giant Loblaw Companies Ltd., and a large interest in Choice Properties Real Estate Investment Trust.
While the bakery business is only a small part of George Weston, it’s a “very attractive asset to the right purchaser,” the company’s president and chief financial officer Richard Dufresne told analysts.
“It has scale in the bakery industry as well as a leading market position in a number of categories,” he said. “We are confident this is the right time to launch a sale process.”
Founded in 1882, Weston Foods produces bread, rolls and other baked goods in Canada and the U.S. The company earned $2.1 billion US in sales in 2020.
Loblaw president to retire
In connection with the sale, the company also announced the retirement of Loblaw president Sarah Davis, effective May 6.
Davis will be succeeded by Galen G. Weston, who will return to his role as chairman and president at Loblaw in addition to continuing his current job as chairman and CEO at George Weston.
“The sale of Weston Foods will allow me to dedicate renewed time and energy at Loblaw, as we increase our momentum in both our bricks-and-mortar network, and our leadership in digital and data,” Galen G. Weston said.
The companies also announced that Robert Sawyer will join Loblaw as chief operating officer and that Richard Dufresne, president and chief financial officer of George Weston, will expand his responsibilities to include chief financial officer of Loblaw on May 6.