S&P affirms Grupo Bimbo

Standard & Poor's said it affirmed the BBB global-scale and mxAA+ national-scale corporate credit ratings on Grupo Bimbo SAB de CV and removed the ratings from CreditWatch, where they were placed with negative implications on Nov. 9, 2010.

The outlook is negative.

The affirmation follows the expectation that Bimbo will complete its acquisition of the North American fresh bakery business of Sara Lee Corp. (BBB/Stable/A-2), Sara Lee NAFB, during the third quarter for $959 million, the agency said.

Through this acquisition bringing well-recognized brands, Bimbo will gain additional scale and geographic footprint in the U.S. market, the agency said. However, certain integration risks could result in lower-than-expected synergies or additional required investments.

The ratings on Bimbo reflect the firm's satisfactory business profile as reflected in its leading position in Mexico's packaged-bread industry, strengthened market position in the United States, geographic and product diversification, and ability to maintain profit margins under adverse economic conditions, the agency added.

The ratings consider the company's increased debt-financed growth strategy, low organic sales volume growth and operation in the highly competitive fresh baked goods industry in the United States, the agency said.

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