Sector News

Weetabix to be swallowed by US group in £1.4bn deal

April 18, 2017
Food & Drink

One of Britain’s best loved breakfast cereals has been gobbled up by the American ­cereal giant Post Holdings in a £1.4bn deal.

The US maker of Golden Crisp and Cocoa Pebbles was tipped as the frontrunner in the race to buy Weetabix last month, and the long-awaited deal was finally confirmed on Tuesday.

The UK’s second biggest cereal brand was put on the blocks by China’s Bright Food, five years after the Shanghai-based company bought a majority stake for £1.2bn.

The Telegraph reported late last month that Bright Food had been hoping to fetch £1.5bn for the 84 year old business, but industry experts said that the sale process had been “challenging” given the cereal company’s recent declining sales and profits.

The last available accounts show that Weetabix sales fell by 2pc to £346.4m while profits slumped by 13pc to £94.3m.

The company has attempted to diversify by launching a breakfast drink to tap into an increasing trend for smoothies and protein-shakes. Meanwhile its range of biscuits have already been pulled after dismal sales.

Associated British Foods, which owns Jordans cereals, had also expressed an interest in buying Weetabix, while the Italian pasta maker Barilla was in the running along with Nestlé, whose cereal brands include Cheerios, and General Mills through their existing Cereal Partners Worldwide joint venture.

Giles Turrell, the chief executive of Weetabix Food Company, said: “Today’s deal is great news for the team at Weetabix and all those who love our brands. The past five years have seen us increase our branded sales at home and overseas.

“Post is a leader within its markets and shares our commitment to providing great tasting nutritious products for the whole family. I’m confident they will help us open doors for continued expansion.”

Jonathan Buxton, the head of retail and consumer at Cavendish Corporate Finance, said: “Weetabix fits very nicely with Posh Holdings, the third largest cereal company in the USA. Post already has a presence in the UK via its iconic Grape-Nuts cereal brand and its expertise in marketing and distributing a range of cereals make it a strong contender to be custodian of the various Weetabix brands.

“Importantly, the $1.8bn takeover of Weetabix will give Post both a significant UK presence and a greater share of the North American market.

“Post has been highly acquisitive in the past and an acquisition of Weetabix could mark the start of a spending spree on UK assets, making the most of its dollar-denominated spending power.”

By Jillian Ambrose and Sam Dean

Source: The Telegraph

comments closed

Related News

September 25, 2022

Coca-Cola names new president of global ventures

Food & Drink

The Coca-Cola Co. has promoted Evguenia (Jeny) Stoichkova to president of global ventures, effective Jan. 1, 2023. Ms. Stoichkova joined Coca-Cola Bulgaria in 2004 and was most recently the president of the company’s Eurasia & Middle East division, a role she has held since 2021.

September 25, 2022

Perfect Day allies with Onego Bio to speed-up launch of animal-free eggs

Food & Drink

US-based Perfect Day, is partnering with Onego Bio, which specializes in creating animal-free eggs, aiming to accelerate the timeline to bring the eggs to the market. The business, with the use of its technology, plans to commercialize animal-free ovalbumin, the most abundant egg white protein extracted through precision fermentation.

September 25, 2022

EU fails on food waste: Report reveals bloc discards more than it imports

Food & Drink

Food waste costs the EU €143 billion per year (US$141.7 billion), with a report by Feedback EU raising the alarm of how it’s vital to reduce waste from farm to fork 50% by 2030 and the only way this will be achieved is by enforcing a mandatory directive forcing the food industry to do better and retailers to pay a tax of food waste.