BAXTERS Food Group is set to double its share of the Canadian soup market after swallowing Ontario-based CanGro Soup for a sum thought to be in eight figures.
Financial terms were not disclosed yesterday as senior directors flew back to Scotland, having signed the deal. The acquisition is likely to boost Baxters Canada's sales of about 16 million by 100 per cent, while market share will double to 20 per cent.
A spokesman for the iconic Scottish food producer said the company was always looking at opportunities and had not ruled out further major acquisitions to fuel its international growth.
Figures released earlier this year revealed sales at the family-owned company had risen 10 per cent to 110 million in the year to 27 May, 2006.
Commenting on the CanGro deal, Baxters' chief executive, Audrey Baxter, said: "The acquisition is very exciting for our business. It allows us the opportunity to consolidate our position and to gain critical mass in the Canadian market.
"Furthermore, there are many value synergies to be released from running three brands and having a significant share of private label business in the soup category."
The acquisition includes the Primo and Aylmer soup brands. Production of the newly acquired products will transfer to Baxters Canada's existing plant at St Hyacinthe, near Montreal.
"The acquisition is incredibly well aligned to our strategic intent," Baxter added. "We continue to seek aggressive growth both in and out of the UK."
Bruce Major, chief executive of privately owned CanGro Foods, said: "The sale of the Aylmer and Primo soup businesses supports our strategy to focus on growth through new products behind our category leading Del Monte and Aylmer brands as well as through accretive acquisitions."
In January, Fochabers-based Baxters unveiled a move into Polish processing with the opening of an onion pickling factory. Baxter insisted that while the plant may eventually be used to broaden the company's product offering in the UK, there were "absolutely no" implications for the firm's Scottish workforce.
Baxters, whose roots go back to 1868, saw its pre-tax profits dip last year to 6.47m. The firm was hit by rising energy costs, which affected the prices of raw materials such as cans and ate into profit margins. Baxters plans to lift sales to about 300m over the next 15 years.
Baxter added: "In growing the international side of our business, we focus on select markets and Canada is one of these markets.
"When the opportunity to acquire CanGro Soup arose, it was an easy decision for us to determine to pursue it."