Brazil’s competition authority, the Administrative Council for Economic Defense (Cade), has raised concerns over Grupo Bimbo’s proposed acquisition of Wickbold’s bakery business in Brazil. In a decision issued on Tuesday (May 27), Cade’s General Superintendence (SG) recommended structural remedies as a condition for approving the deal and referred the case to the agency’s Administrative Tribunal for further review.
The transaction, announced in August 2024, involves Bimbo do Brasil Ltda., a subsidiary of Mexican multinational Grupo Bimbo, acquiring the industrial baking operations of the Wickbold Group, including its well-known brands Wickbold®, Seven Boys®, and Tá Pronto®. The acquisition also encompasses four manufacturing facilities in Brazil’s southern region and more than 2,500 employees.
Both companies are leading players in Brazil’s industrial bakery sector. Bimbo markets products such as sliced bread, cakes, snacks, and rolls under brands like Pullman, Plusvita, Ana Maria, Rap10 Bisnaguito, and Crocantíssimo. Wickbold’s portfolio includes ready-to-eat breads, panettones, cookies, and sweet baked goods, catering to both retail and food service segments across the country.
Following a detailed competition assessment, SG/Cade identified horizontal overlaps in the national markets for packaged cakes, mini cakes, and industrialized bread sold through food service channels. Additional overlaps were found in specific segments of the retail bread market, which were analyzed at both national and regional levels. Cade noted that Brazil’s regional markets have distinct competitive dynamics, with variations in the ability of local players to respond to price shifts or increased demand.
The analysis pointed out that not all bread products are substitutable, either from a supply or demand perspective. Market testing revealed that consumer behavior varies significantly across categories—some consumers are driven primarily by price, while others show strong brand loyalty or place high value on tradition and manufacturer reputation. In certain segments, consumers appeared more willing to absorb price increases due to the lack of equivalent alternatives.
SG/Cade flagged particular concerns in the multigrain sliced bread and tortilla/wrap bread segments, both nationally and in several regional markets. Other product categories also showed potential competition risks in localized areas. The agency concluded that the deal could result in significant market concentration and reduced competitive pressure in these segments.
As a result, the General Superintendence recommended the imposition of structural remedies to address these concerns. While specific remedies were not disclosed in the dispatch, such measures often include divestitures of assets, brands, or production facilities to preserve competition.
The case now moves to Cade’s Administrative Tribunal, where it will be assigned to a reporting commissioner responsible for guiding the analysis and presenting it to the full board for judgment. Cade has a legal deadline of 240 days to issue a final decision on the merger, extendable by an additional 90 days.
Grupo Bimbo, the world’s largest bakery company with operations in over 35 countries, described the acquisition as a strategic move to strengthen its presence in southern Brazil. “This family-owned business complements our brand portfolio with brands that consumers love,” said Grupo Bimbo CEO Rafael Pamias at the time of the announcement.
The outcome of Cade’s review will determine whether Grupo Bimbo can proceed with integrating one of Brazil’s most iconic baking businesses into its global portfolio.
