China chews up Weetabix in £1.2bn buyout
A CONTROLLING stake in historic breakfast cereal firm Weetabix has been sold to China in a £1.2bn deal in the latest swoop for British assets.
State-owned Bright Foods, based in Shanghai, has taken a 60 per cent stake in the Weetabix Food Company in the largest foreign acquisition by a Chinese food group.
Weetabix, which also makes Alpen and Ready Brek, is Britain’s second-largest cereals group and turned over £422m in 2010. It exports to 80 countries and the remaining 40 per cent is owned by buyout firm Lion Capital and the management.
Bright Foods is expected to lead a further growth push in Asia and sources close to the firm said they are not looking to make immediate job cuts in Britain.
Chairman Zongnan Wang said: “With Bright Food’s strong resources and our expertise in both the Chinese and broader international markets, we are excellently placed to develop the Weetabix business.”
The deal, which is subject to regulatory and government approval in China, values the Kettering-based firm at £1.2bn including debt.
Bright Food executives have said that they are targeting overseas wine, sugar and dairy assets but it has a mixed record in bids.
The firm, which turned over $12.2bn last year, has invested in Australia’s Manassen and New Zealand milk producer Synlait in the last two years but lost out in bids for United Biscuits,, French yoghurt-maker Yoplait and CSR’s sugar business.
Weetabix, set up 80 years ago, was sold by the George family for £642m in 2004 to US private equity firm Hicks Muse Tate & Furst, which later restructured and spun out its European buyout arm to form Lion Capital.
The Bright Foods deal comes three weeks after UK tailor Gieves & Hawkes was sold to its Hong Kong licensee Trinity. China’s sovereign wealth fund bought a minority stake in Thames Water in January.