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Divestiture Trustee Announces Sale of Sara Lee and EarthGrains Brands in California and Oklahoma City Area to Flowers Foods
October 26, 2012
Dechert News Release

James A. Fishkin, a Dechert LLP partner appointed as the Divestiture Trustee in United States v. Grupo Bimbo S.A.B. de C.V., et al., Civ. A. No. 11-01857 (D.D.C.) by the United States District Court for the District of Columbia, notified the parties on October 24, 2012 that he reached an agreement to sell certain Sara Lee® and EarthGrains® products distributed in California and the Oklahoma City area to Flowers Foods, Inc. as well as certain related assets. BBU, Inc. is a subsidiary of Grupo Bimbo S.A.B. de C.V. On October 26, 2012 the U.S. Department of Justice notified Fishkin and Grupo Bimbo that it had no objections to the agreements that Fishkin reached with Flowers, thus allowing the transaction to move forward.

The transaction involves Flowers’ receipt of perpetual, exclusive, and royalty-free licenses to the Sara Lee® and EarthGrains® brands for sliced breads, buns, and rolls in the state of California which together account for annual sales totaling more than $134 million. Flowers will also receive an exclusive, perpetual, and royalty-free license to the EarthGrains® brand for a broad range of fresh bakery products in the Oklahoma City area. The transaction is expected to close in the first quarter of fiscal 2013.

Commenting on the sale to Flowers and the approval by the Department of Justice, Fishkin said, “I am pleased that I was able to reach an agreement with Flowers for the sale of certain Sara Lee® and EarthGrains® brands distributed in California and the Oklahoma City area consistent with the goals expressed by the Department of Justice in its settlement with Grupo Bimbo and BBU. As the second-largest producer and marketer of packaged bakery foods for retail and foodservice customers in the United States, Flowers is in a unique position where it can effectively preserve the premerger level of competition that existed between BBU and Sara Lee in California and the Oklahoma City area.”

As Divestiture Trustee, Fishkin has overseen a Dechert team of attorneys including Paul Frangie and David Stanoch (competition/antitrust) and Ian Hartman and Jennifer Porter (corporate).

The U.S. Department of Justice (DOJ) reached a settlement agreement with Grupo Bimbo S.A.B. de C.V., BBU, Inc., and the Sara Lee Corporation on October 21, 2011. The buyers, Grupo Bimbo and BBU, agreed to divest certain brands of sliced fresh bread and related assets to complete their acquisition of Sara Lee’s North American Fresh Bakery Business.

After Grupo Bimbo and BBU were unable to complete the required divestitures in the time permitted, in late February 2012, the Justice Department requested Judge Emmet G. Sullivan to appoint Fishkin as the Divestiture Trustee. In its uncontested court filings requesting Judge Sullivan to appoint Fishkin as the Divestiture Trustee with the power and authority to divest certain brands and assets as required pursuant to the settlement that had been reached between BBU and the Justice Department, the DOJ said that “Mr. Fishkin possesses the expertise, experience and organization necessary to accomplish the successful divestiture of the Divestiture Assets . . . In his tenure at the Federal Trade Commission and in private practice, Mr. Fishkin has had experience with antitrust consent decrees and the sale of divestiture assets, including in matters involving food product manufacturers . . . Mr. Fishkin is well-suited to assume the responsibilities of Divestiture Trustee under the Final Judgment.” He is the first Divestiture Trustee to be appointed at the DOJ’s behest since 2008.

Fishkin entered private practice in 2002 after 15 years with the Federal Trade Commission (FTC), where he was the architect of the FTC’s supermarket merger enforcement program and served as lead attorney on many food product mergers as well as mergers in other industries. He advises on the antitrust/competition aspects of mergers and acquisitions covering a wide range of industries, including supermarket chains and other retailers, consumer and food product manufacturers, internet-based firms, and chemical and industrial gas firms. He has been a key participant in several of the most significant antitrust cases in the last two decades that have set important precedents, including representing Whole Foods Market, Inc. in FTC v. Whole Foods Market, Inc. and representing the Federal Trade Commission in FTC v. Staples, Inc. and FTC v. H.J. Heinz Co.