HIESTAND HOLDING shareholders have approved a plan to merge with IAWS to create the world's biggest maker of frozen baked goods.

Shareholders representing 91.3 per cent of votes at a meeting were in favour of the merger, the Switzerland-based company said yesterday in a statement.

Dublin-based food group IAWS, which already has a 64 per cent stake in Hiestand, will own 83.3 per cent of the new baker, Aryzta, and Hiestand will have 8.7 per cent.

Its shareholders gave their approval to the merger in July, with 99.97 per cent of voting to accept the deal.

Only 75 per cent approval was needed to accept the merger.

Owen Killian, chief executive of IAWS, said the firm was pleased with the support received to create Aryzta.

"This truly transformational event is the culmination of five years of partnership between IAWS and Hiestand," he said.

Under the deal, IAWS will get the Swiss company's Fricopan garlic baguettes and Hiestand croissants, which are winning market share from Europe's traditional bakeries.

The European and US frozen baked-goods markets are growing at 4 per cent a year, according to IAWS, faster than sales at old-fashioned bakeries.

Frozen baked goods generate about €30 billion a year in sales globally.

The new entity, Aryzta, aims to double per-share profit in five years, according to Mr Killian, who will head the company.

Owners of IAWS stock will receive one Aryzta share for every two IAWS shares held.

Hiestand investors will get 36 Aryzta shares for each share held.

IAWS bought 22 per cent of Hiestand from founder Alfred Hiestand in 2003.

The Irish baker has raised its stake to 64 per cent by purchasing Hiestand shares owned by Lion Capital, the leveraged buyout firm that owns Weetabix cereal.

The new company will be based in Switzerland and its shares will trade both in Zürich and Dublin. IAWS will delist from the stock exchange today.

The Irish Stock Exchange has already approved the listing of Aryzta and shares are expected to list at €30 on August 22nd, twice what IAWS currently sells at.

- (Additional reporting Bloomberg)