Bimbo lays out some bread…

Despite the general credit crunch, Grupo Bimbo managed to come up with the $2.4 billion (thousand million) U.S. dollars needed to buy out the Canadian-owned George Wesson, Ltd.  According to Milenio, the purchase will make make Bimbo about twice the size (in annual sales) as the next largest baked goods seller, Kraft Foods.

The debt is financed through six different banks, and one third is payable in Mexican Pesos, the rest in U.S. dollars.  Mexican companies that have run into trouble lately (like Comercial Mexicana) had financed their growth solely on dollar-denominated lending.  It’s still a lot of dough (sorry… had to say it).  Probably the only impact on Mexican consumers will be a label change on some products.  “Pan Bimbo” is already slang for “white bread” (as in boring, as well as … white bread), even though Bimbo bought out Continental Baking several years ago, and the packages often say “Wonder Bread”.

The other thing to notice is that successful Mexican companies which have a world presence, like Bimbo or Cemex, stick to basics… food (Bimbo), cement (Cemex) or telephones (TelMex).  While the Slim family controlled Carso Group operates in a number of unrelated sectors (banking, telecommunications, retail stores, hotels), the companies under Carso ownership keep their separate identity and Carso stays out of the day to day operations of the firm.  What’s making the Mexican companies so successful is the weird idea that wealth is measured in goods and services… not just stock prices.