Chinese firm takes big bite out of Weetabix
Bright Food to buy 60pc stake in UK breakfast cereal maker
CHINA'S Bright Food will take control of breakfast cereal maker Weetabix, beloved by generations of Irish children, in the biggest foreign acquisition by a Chinese food group.
State-owned Bright Food has agreed to buy a 60pc stake in the British company in a deal which puts a value of €1.2bn, including debt, on the private-equity owned company that coined the slogan "Have you had your Weetabix today?"
The Shanghai-based group has been on the acquisition trail, seeking to raise its profile and cater for its rapidly growing home market. Weetabix is its second foreign purchase in a year and its first in Europe after other deals fell through.
Eighty-year-old Weetabix is Britain's second biggest maker of breakfast cereals and cereal bars after Kellogg.
Its brands include Alpen muesli and Ready Brek as well as Weetabix, which is Britain's top breakfast cereal for under-5s and is made from wheat grown within 80 km of its base in southern England.
"As China's leading food group, we are pleased to become the controlling shareholder of Weetabix," Bright Food chairman Wang Zhongnan said in a statement yesterday. "Weetabix has an excellent product portfolio, including leading British cereal brand Weetabix and other category-leading brands."
Private equity owners Lion Capital and Weetabix management will keep a 40pc stake.
The breakfast cereal group was founded in 1932 by the secretive George family and soon began producing its iconic bricks of wheat. It was bought by a private equity firm in 2004.
Bright Food now sees a big opportunity for Weetabix in China, where breakfast is a very important meal and there is a trend towards healthy eating.
The group, which makes "White Rabbit" candy, bought majority stakes in Australia's Manassen Foods and New Zealand's Synlait Milk over the past two years.
Analysts expected more deals would now follow in Europe after its earlier failed attempts to buy Britain's private-equity owned United Biscuits, the McVitie's and Hula Hoops group, and a stake in French yogurt firm Yoplait.
"This is a trend," said Ghislain de Mareuil, a Paris-based lawyer at De Pardieu Brocas Maffei. "In China, you have to set an example, and then others follow. What Bright Food has done will definitely set a trend for other Chinese food companies."
Weetabix had sales of more than £460m (€566m) in 2011 and employs 1,800 people.
It has around 7pc of the British breakfast cereal market. As well as Kellogg, it competes with the Swiss-based joint venture Cereal Partners between Nestle and General Mills whose brands include Shreddies and Cheerios.