Deloitte advises Mexican bakery on Romanian market entry

11 April 2023 Consultancy.eu 2 min. read

Mexican bakery Grupo Bimbo has entered the Romanian market through a deal with local player Vel Pitar. The acquisition was advised on by M&A advisors from Deloitte.

Commenting on the firm’s buy-side support to the deal, Radu Dumitrescu, Head of Deloitte’s Financial Advisory division in Romania, said: “The successful completion of this landmark transaction is the result of several months of work throughout last year.”

“I would like to thank Bimbo Group for giving us the possibility to be part of this milestone transaction in the bread industry and wish them a swift integration of the business in their global or regional teams.”

Deloitte advises Mexican bakery on Romanian market entry

With revenues of over $15 billion, Mexico City-headquartered Grupo Bimbo is the world’s largest baking company.

As part of its internationalisation strategy, the company has branched out in recent years. After acquiring East Balt Bakeries in 2017 (which provided the Grupo Bimbo entry into eight new countries in Asia, Middle East and Africa), the Mexican group closed a series of deals opening doors to a range of new markets, including the European markets of France, Switzerland, Italy, Ukraine, Russia and Turkey.

In 2021, Grupo Bimbo acquired India-based bakery Kitty Bread, shortly after the Mexican giant secured another Indian baker, Modern Foods, earlier that year. The company also bolted-on American popcorn maker Popcornopolis.

Last year Grupo Bimbo closed its purchase of the UK-based St. Pierre Groupe, a bakery with three brands under its mantle: St Pierre, Baker Street and Paul Hollywood.

The latest deal, that of Bucharest-headquartered Vel Pitar, sees Grupo Bimbo kickstart in yet another European country – Romania.

Established in 1999, through the merger of four factories in the milling and baking sector, Vel Pitar has 10 bakery plants in 9 cities across Romania, around 1,800 employees, more than 7,000 stores and a diverse portfolio of a dozen or so well-known bread and other brands including Vel Pitar, French Toast, Grau Intreg, and Chef Gourmand.

Despite facing challenges in the market due to increasing competition and rising raw material costs, Vel Pitar has been able to maintain its position as the second-largest player in the bakery and cereals industry in Romania, with a 10% share in market value terms.

Expanding its reach

The acquisition by Grupo Bimbo is expected to provide Vel Pitar with access to new markets and distribution channels, enabling the company to expand its reach beyond Romania.

Deloitte’s deal team consisted of a multi-disciplinary team of advisors including: Radu Dumitrescu, Florin Paunescu, Angelos Fragkos, Ruxandra Vasile, Vlad Balan, Laura Necsuliu, Andreea Voinea, Andrea Artin, Burcin Atakan, Irina Chiriac, Laura Avram, Emil-Ioan Borza-Dediu, Vasile Beleuta, Dan Badin, Mihaela Iacob, Laura Bobar, Ana Irina Bica, Ioana Siretchi, Florentina Munteanu, Gabriela Ilie, and Irina Picos.

The team provided corporate finance, financial and forensic due diligence, fiscal and tax advisory services, as well as legal support services (delivered by Deloitte Legal).

In Romania, Big Four firm Deloitte has over 3,000 professionals.