Mexico City-based Grupo Bimbo, one of the world’s largest bread makers, has emerged as the leading candidate to acquire Canada Bread Co. Ltd. from majority owner Maple Leaf Foods Inc., Toronto, according to the international news agency Reuters.

Other parties involved in the auction of the approximately $1.64 billion bakery company, including private equity firms KKR & Co. L.P., New York, and Bain Capital LLC, Boston, and Thomasville, Ga.-based Flowers Foods Inc., are reportedly no longer pursuing a deal.

Purchasing Canada Bread, one of two dominant bakery companies in the U.S., would enable Bimbo to build on its U.S. acquisitions and strengthen the Mexican company’s position as the top bread maker in North America. In 2010, Bimbo acquired Sara Lee Corp.’s North American bakery business for $959 million. Last year, the company purchased Hostess Brands Inc.’s Beefsteak bread brand.

Discussions with Bimbo are continuing, and there is no guarantee the two sides will reach a deal, sources told Reuters. Other buyers may still step up, they added.

Maple Leaf, Canada Bread, KKR and Grupo Bimbo declined to comment, while Bain did not respond to a request for comment.

Source: Reuters