Hibernia Foods, the Nasdaqlisted food manufacturing group, has increased the size of its business by 50 per cent with the acquisition of Sara Lee's bakery business in the UK.

Hibernia is paying £6 million sterling (#10 million) for the Sara Lee business which had sales last year of £50 million.

The acquisition will treble Hibernia's sales to £150 million. As well as buying a modern bakery in Bridlington, Hibernia will become the exclusive Irish and British licensee for Sara Lee sweet frozen bakery goods. It will also acquire established brand names: Kaysens, Finnegans Famous Cakes and Death by Chocolate.

About two-thirds of Sara Lee's baking business in the UK is to the major British supermarkets, with over a quarter to the food service market and the balance in export sales. The majority of the retail sales are under the Sara Lee brand, which is the brand leader in the British frozen dessert market.

Hibernia chairman and chief executive Mr Oliver Murphy said Hibernia had bought out its biggest competitor in the British frozen desserts market. The acquisition gave the group a balance between its private label and branded business.

"The Sara Lee US bakery business will position us as the largest supplier of branded and private label frozen desserts in the UK, and provides us with an ideal balance between branded and private-label revenues within this sector."

Mr Murphy expected significant economies of scale. "Our goal is to replicate with the Sara Lee brand the tremendous growth we have achieved with the Entenmanns brand since we acquired that business in 1998." He added: "We would expect that a focused, branded strategy will benefit the category as a whole and thus contribute towards the continued development of our private-label frozen desserts business."

This is Hibernia's second acquisition in three months. In March, it bought the La Boheme chilled desserts group, which had sales of £12.5 million.