MEXICO CITY (Reuters) - Mexico's Bimbo is buying the U.S. breadmaking unit of Canada's George Weston Ltd for $2.38 billion, giving it a chunk of the eastern U.S. market with one of the biggest acquisitions in its history.

Shares of Bimbo <BIMBOA.MX _counted="undefined">dropped 3.4 percent to 59 pesos, bucking a firmer Mexican market, after the breadmaker said on Wednesday it had an agreement to buy George Weston's <WN.TO _counted="undefined">Weston Foods Inc unit and would use credit to finance the acquisition.

Pending authorization from regulatory authorities, the deal is expected to close in the first quarter of next year.

Bimbo is one of the world's top breadmakers and the new acquisition will complement its 2002 purchase of George Weston's bread baking operations in the western United States for $610 million.

Weston Foods Inc. had sales of nearly $2.2 billion in the 12 months ended on October 4 and it will give Bimbo access to the Boboli, Brownberry, Entenmann's, Freihofer's, Stroehmann and Thomas' brands of breads, rolls, muffins and bagels.

Bimbo said it would finance the purchase using a long-term credit of $1.7 billion, in two tranches of three and five years each, and a $600 million bridge loan with a one-year maturity.

Bimbo said last week it was in talks with George Weston, prompting Standard & Poor's to place its ratings on Bimbo's debt on credit watch with negative implications, on concerns the deal would be debt financed.

S&P analysts could not immediately comment on Wednesday.

Bimbo sells its products, ranging from pastries to peanuts, in Latin America, Europe and Asia. It had sales of 20.6 billion pesos ($1.88 billion) in the third quarter of 2008, and a net profit of 1.365 billion pesos ($125 million).

Under the agreement with George Weston, if Bimbo fails to complete the deal due to financing problems, it must pay the Canadian company a $100 million penalty.

The move by George Weston comes days after the Canadian company closed the sale of Neilson Dairy to Saputo Inc <SAP.TO _counted="undefined">.

Analysts say George Weston could use proceeds from the sale to Bimbo to buy the 39.1 percent of Loblaw Cos <L.TO _counted="undefined">, Canada's biggest grocer, that it does not already own.

George Weston shares gained nearly 2 percent, or C$1.19, to C$62.11 on the Toronto Stock Exchange. The stock has gained about 17 percent over the last 12 months