MEXICO CITY, MEXICO — The U.S. Department of Justice (DOJ) has reached an agreement with Grupo Bimbo SAB de CV and Sara Lee Corp. under which Bimbo will be able to purchase the North American Fresh Bakery business of Sara Lee.

First announced in November 2010, the acquisition would extend Bimbo Bakeries USA’s (BBU) position as the largest baking company in the U.S. Sara Lee is the nation’s third largest fresh baking company.

Under terms of the agreement, Bimbo will be required to divest certain brands and related assets and routes in specified markets. With the divestitures, Bimbo will be paying $709 million for the acquisition rather than the originally announced price of $959 million.

Under the revised transaction Bimbo will acquire a business with annual sales of about $1.845 billion, versus $2 billion when the deal was first announced.

“We are pleased to move forward with our planned acquisition of Sara Lee’s North American Fresh bakery business,” said Daniel Servitje, Grupo Bimbo chief executive officer (CEO). “It is a significant milestone for the growth of our company, and one that will create significant value for customers, consumers, associates and shareholders.”

Bimbo said its agreement with the DOJ will require the divestiture of the Sara Lee and EarthGrains brands in California, U.S. and smaller brands in the Harrisburg/Scranton region of Pennsylvania, U.S. and the Kansas City, Missouri, U.S.; Oklahoma City, Oklahoma, U.S.; and Omaha, Nebraska, U.S. metropolitan areas.

The smaller brands, itemized by the DOJ, include Sara Lee’s EarthGrains brand and BBU’s Mrs Baird’s brand in the Kansas City area; Sara Lee’s EarthGrains brand in the Oklahoma City area; Sara Lee’s EarthGrains and Healthy Choice brands in the Omaha area; and Sara Lee’s Holsum and Milano brands in the Harrisburg/Scranton area. The divestitures also will include associated manufacturing, distribution and marketing assets needed “to compete effectively in the sale of those brands in those areas,” the DOJ said.

In actions toward achieving a resolution of the matter, the Antitrust Division of the DOJ filed a civil lawsuit in U.S. District Court in Washington, D.C. to stop the proposed acquisition. The department simultaneously filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit, the DOJ said.

“BBU and Sara Lee’s North American Fresh Bakery business aggressively compete head-to-head for sliced fresh bread sold in retail stores,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Without the divestitures required by the department in eight geographic markets, the combination of BBU and Sara Lee’s North American Fresh Bakery business would likely lead to millions of Americans paying higher prices for sliced fresh bread.”

According to the complaint, BBU and Sara Lee are the largest baking companies in the San Diego, Los Angeles, Sacramento and Harrisburg/Scranton areas. In the San Francisco area, BBU is the largest seller of sliced bread and Sara Lee is the third largest. In the Kansas City and Omaha areas, Sara Lee and BBU are first and third largest sellers of sliced bread, respectively; in the Oklahoma City area, Sara Lee and BBU are the first and fourth largest, respectively.

“In the eight relevant geographic areas, BBU’s post-merger share would range from approximately 52% to 63%, with the combination resulting in highly concentrated markets,” the DOJ said. “The department said that the loss of competition likely would have resulted in higher bread prices.”

Commenting on the agreement, Marcel Smits, CEO of Sara Lee, said the company was “very pleased” it will be able to move forward with the transaction.

“The North American Fresh Bakery business is a great fit for Grupo Bimbo, and this transaction allows Sara Lee to aggressively drive growth in our core coffee and meats categories as well as return shareholder value,” Smits said.

Sara Lee said with the transaction, the company’s 13,000 North American Fresh Bakery employees will transfer to Bimbo. The company said the sale includes 41 plants in the U.S. and approximately 4,800 bakery routes (though these figures do not account for pending divestitures).

Servitje said Bimbo will hit the ground running once the transaction closes.

“The integration process will begin immediately after closing, and we expect to gradually reach $150 million in annual synergies,” he added.