BRIGHT FOOD has acquired control of breakfast cereal maker Weetabix as part of an overseas buying spree that has seen the state-owned Chinese group bidding for some of the world’s most famous food brands.
Bright, one of China’s largest food groups, bought a 60 per cent stake from private equity group Lion Capital, which retains 40 per cent of Weetabix shares. The deal, announced yesterday, values Weetabix at £1.2 billion, including debt.
Successful conclusion of the deal would mark Bright’s first big European brand acquisition after a string of high-profile failures. Bright lost out to General Mills last year in its bid to purchase a stake in French yogurt maker Yoplait
Earlier it walked away from talks to acquire another UK brand, United Biscuits, maker of Jaffa Cakes and Hula Hoops.
Bright has had more success recently in Australia, where it acquired a 75 per cent stake in Manassen Foods last year.
The two sides said yesterday’s deal, which is subject to regulatory approvals in China and to anti-trust approvals, is the largest overseas acquisition by a Chinese company in the food and beverage sector.
Lion Capital, which bought Weetabix in 2004, has previously been unable to find a buyer willing to pay a sufficiently high price.
Talks with Bright Food kicked off shortly after Giles Turrell took up the helm as chief executive officer of Weetabix, replacing Ken Wood, last September.
Bright chairman Wang Zongnan said Bright planned to expand the Weetabix brand in Asia and particularly in China.
While breakfast habits on the mainland are very different from those in the west, food analysts in China say western eating habits are beginning to catch on.
According to figures from Euromonitor, the breakfast cereal market in China had sales of only 1.2 billion renmimbi (€145 million) last year, but has seen double-digit growth for several years and is forecast to expand 12.5 per cent this year.
“I think there is a place in the market for Weetabix,” said Ben Cavender of China Market Research in Shanghai.
However, Bright may want to adapt the product for Chinese tastes, he added. – (Copyright The Financial Times Limited 2012)
