TORONTO — Grupo Bimbo SAB de CV is seeking C$2 billion in damages ($1.42 billion) from Maple Leaf Foods Inc. in connection with Bimbo’s 2014 acquisition of Canada Bread Co. Ltd. and an industrywide bread price-fixing scheme in Canada.

In a Nov. 28 filing with the Ontario Superior Court of Justice, Grupo Bimbo issued a statement of claim against Maple Leaf and certain senior officers and directors, alleging “fraudulent and negligent misrepresentation during the Canada Bread sale process.”

Mexico-based Grupo Bimbo said it seeks the damage award “or restitution for unjust enrichment.” Mississauga, Ont.-based Maple Leaf called Bimbo’s claim groundless.

Canada Bread was acquired by Grupo Bimbo SAB de CV in May 2014. When the C$1.83 billion deal was announced in February 2014, Maple Leaf owned 90% of Canada Bread’s voting stock.

The Competition Bureau of Canada in January 2016 began an investigation into alleged price-fixing in the nation’s commercial bread industry by major suppliers and retailers. Covering a period from late 2001 to March 2015, the probe led to class actions being brought against Canada Bread and, in June 2023, a settlement in which the company agreed to pay a C$50 million fine.

“The plaintiff, Grupo Bimbo SAB de CV, is seeking over C$2 billion in damages as a result of fraudulent and negligent misrepresentations made by the defendants to Grupo Bimbo in the course of Grupo Bimbo’s acquisition of Canada Bread,” Grupo Bimbo’s statement of claim said. “In reliance on these misrepresentations, Grupo Bimbo has suffered losses related to, among other things, the price it paid to acquire Canada Bread, investments it made into Canada Bread, and expenses related to an investigation by the Competition Bureau into Canada Bread.”

Grupo Bimbo contends that Maple Leaf, as the controlling owner of Canada Bread, led the transaction negotiations and due diligence process for the company’s sale but that it didn’t learn until late October 2017 that Canada Bread and Maple Leaf “were alleged to have been parties to a price-fixing conspiracy relating to packaged bread.”

“The substantial acquisition price Grupo Bimbo paid for Canada Bread was predicated on Maple Leaf’s representations to Grupo Bimbo that Canada Bread operated in material compliance with all applicable laws and had publicly disclosed all material facts relating to its business, operations and financial results in accordance with applicable laws,” Grupo Bimbo’s claim stated. “These representations were false.”

Michael McCain, executive chair of Maple Leaf Foods, called Grupo Bimbo’s Nov. 28 claim “an abuse of judicial process, without any merit whatsoever.”

“The Mexican company, Bimbo, is distracting attention from its own mismanagement of a Canadian business by asserting ridiculous claims which are not even consistent with its own prior admissions,” said McCain, one of the executives named in Grupo Bimbo’s claim. “To say we will defend against this frivolous action vigorously would be a colossal understatement. Maple Leaf Foods and its officers acted appropriately at all times, including with respect to making full, plain and true disclosure to Grupo Bimbo at the time of its acquisition of Canada Bread.”

Grupo Bimbo’s claim comes nearly two weeks after Maple Leaf sued Canada Bread and Bimbo for defamation. In a lawsuit filed Nov. 21, Maple Leaf charged that Canada Bread and Grupo Bimbo made false and defamatory allegations, including in published statements, about Maple Leaf related to the bread price-fixing case.