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George Weston Ltd. has agreed to sell the remainder of its bakery division, which produces cookies, crackers, cones and wafers for retail and foodservice businesses in the United States and Canada, for $370-million.

The Toronto-based company announced the planned sale to Illinois-based Hearthside Food Solutions, LLC on Monday. The deal follows George Weston’s announcement last month of the $1.2-billion sale of its Weston Foods fresh and frozen bakery business – which produces brands such as Wonder Bread, ACE Bakery and Country Harvest – to Toronto-based FGF Brands Inc.

The deal announced Monday represented roughly a quarter of Weston Foods’s net sales last year. Hearthside provides food packaging services and produces foods such as baked goods, snacks, sandwiches and entrees.

George Weston first announced its plan to sell the bakery business last March, saying at the time that it intended to focus on its retail operations and real estate holdings. The company has majority ownership of grocery giant Loblaw Cos. Ltd. and Choice Properties Real Estate Investment Trust, which holds a broad portfolio of retail, industrial and office properties, many of them anchored by Loblaws stores.

Weston Foods is a relatively small part of George Weston’s business, generating an operating profit of $3-million on $2.1-billion in sales in fiscal 2020. Costs related to the pandemic and a restructuring plan weighed down the bakery operations’ profits.

The decision to sell came amid the completion of a multiyear transformation at Weston Foods last year, which included a strategic review of the business. George Weston’s management team considered keeping Weston Foods within the company and scaling up through acquisitions, but ultimately chose instead to sell the business.

“With the agreement to sell the ambient [bakery] segment to Hearthside and our previously announced sale of the fresh and frozen businesses, we have two high-quality buyers that are well-positioned to carry on the proud legacy of the Weston Foods business,” George Weston chairman and chief executive officer Galen G. Weston said in a statement Monday.

The company plans to use the money from the two deals for share repurchases over time.

The deal is subject to regulatory approval and is expected to close in early 2022.

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