China's Bright Food takes 60pc stake in Weetabix
WEETABIX has fallen into Chinese hands after it was confirmed a company backed by the state has snapped up a controlling 60pc stake in the iconic brand.
Bright Food, one of China's biggest food companies, has bought a 60pc stake in Weetabix from private equity group Lion Capital in a deal that values the company at £1.2bn (€1.5bn).
The acquisition is the biggest by a Chinese company in the global food and drinks sector. It is also being seen as a sign of things to come as Chinese groups and wealthy individuals circle assets in the UK.
Bright Food made an attempt in 2010 to buy United Biscuits, the owner of brands including Jaffa Cakes and McCoy's crisps. It has been in negotiations over Weetabix for six months.
Lion Capital, the buy-out group based in London and New York that purchased Weetabix in 2004, had been expected to sell the business outright.
But Lyndon Lea, a partner at the group, said the deal with Bright Food would offer a major growth opportunity for Weetabix in the lucrative Asian market. It will give the UK company instant access to an important distribution network in Asia, he added.
Weetabix, which also owns brands such as Alpen and Ready Brek, already exports to 80 countries but has only a "tiny" footprint in China, where consumers are increasingly hungry for Western foods.
It is understood Weetabix has already begun developing products that might be more suited to the Asian palate.
"We have now got a very substantial and well connected Asian owner and they have a lot of distribution in China," Mr Lea said.
"It enables us to get ahead of the curve by probably more than 10 years in terms of accessing the Chinese market."
Zongnan Wang, chairman of Bright Food, said: "We are excited by the many growth opportunities for the business, especially in international markets, and Asia in particular."
The new owner stressed the deal would not change jobs and production in the UK.
The deal will be subject to regulatory and government approval in China and is expected to complete by the end of the year.
Weetabix was founded in Northamptonshire in 1932 under the name British and African Cereal Company.
It is the latest British food manufacturer to fall into foreign hands following the 2010 takeover of Cadbury by US giant Kraft.