A Weetabix logo on the side of its factory in Northamptonshire, UK.
British cereal maker Weetabix is to be acquired by US firm Post Holdings for $1.8 billion, following reports in January that majority owner Bright Foods would sell up.
China’s Bright Food bought a 60% stake in the company in 2012 but had failed to make the headway into the Chinese market that it intended.
Associated British Foods and pasta maker Barilla had both been touted as prospective suitors to Weetabix when news of the sale emerged earlier in the year. But it will be the US’ Post Holdings – owner of cereal brands Golden Crisp and Cocoa Pebbles – that takes the business over.
As well as its flagship range of wheat biscuits, which are the second most popular breakfast cereal in the UK, Weetabix also produces the Ready Brek and Alpen brands.
The business turned over almost £350 million in 2015, but falling pre-tax profits raised concerns about the company’s ability to meet its target sale price. Indeed, the $1.76 billion that Post Holdings will pay for Weetabix is slightly lower than the £1.5 billion valuation reported in January.
Faltering performance for Weetabix in China had prompted Bright Food to cash in. The country’s uptake of the cereal had been slower than the company had hoped for with Chinese consumers still preferring hot, rice-based breakfasts, the BBC reported.
Bright Food acquired its stake in Weetabix in 2012 in a deal that valued the company at around £1.2 billion.
The remaining 40% stake is owned by Baring Private Equity Asia – one of Asia’s largest private equity groups – which has also agreed to sell its stake to Post Holdings.
Weetabix was founded in 1932 and sources all the wheat used in its breakfast cereals from within a 50-mile radius of its mills in Burton Latimer, Northamptonshire.
The mills currently export to over 80 countries around the world, employing around 1,800 staff members internationally and operating manufacturing plants overseas – including in North America.
© FoodBev Media Ltd 2017