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Grupo Bimbo has initiated legal proceedings against Maple Leaf Foods and several former senior officers, seeking over CAD $2 billion in damages linked to the contentious sale of Canada Bread Company in 2014.

This claim, filed in the Ontario Superior Court of Justice, alleges fraudulent and negligent misrepresentation during the transaction process.

At the time of the sale, Maple Leaf Foods controlled 90% of Canada Bread and was responsible for the negotiation and due diligence of the sale.

Grupo Bimbo asserts that the representations made by Maple Leaf during this process were misleading, which has significant implications for the integrity of corporate transactions within the food and beverage sector.

The backdrop to this legal action includes a troubling history for Canada Bread. In 2017, the company came under investigation by the Competition Bureau for price-fixing within the commercial bread industry. This investigation culminated in a CAD $50 million fine imposed on Canada Bread in 2023, alongside an ongoing class action lawsuit involving various market participants.

The ramifications of these legal challenges raise questions about corporate governance and compliance in the food industry, particularly among major players.

Grupo Bimbo's claim underscores the heightened scrutiny on mergers and acquisitions in the food sector, where transparency and ethical practices are increasingly critical.

The filing comes at a time when Grupo Bimbo is focusing on sustainability and ethical practices, having recently reported that 93% of its packaging is made from recyclable materials.

This situation highlights the necessity for rigorous due diligence and integrity in the food sector, as companies face increasing pressure from consumers and regulators alike to maintain ethical standards.

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