Cereal firm Weetabix sold to American giant for £1.4bn

Weetabix 'set to be sold to US firm'

Post Holdings will but the brand for $1.76bn (£1.4bn) from Shanghai-based Bright Food, according to the Financial Times. (KHC.O), while Reckitt Benckiser Group Plc is considering a sale of its French's Foods unit after agreeing to buy infant-formula maker Mead Johnson Nutrition Co.

Linklaters and Ropes & Grey acted for Baring Private Equity Asia and Shanghai's Bright Food Group on the sale of United Kingdom firm Weetabix Ltd. while Baker McKenzie advised USA firm Post Holdings Ltd.

Turrell said at the time Weetabix doubled its business to China previous year, and there was a growing demand for high quality, imported British foods. When The Bright Group first took over, the idea was to push the oval-shaped high-fiber breakfast cereal in potentially lucrative Asian markets, something which has not really been successful in recent years as consumers are not traditionally used to eating cold breakfast cereals with milk.

Weetabix was family-owned until 2004, when it was bought by the first of two successive private equity owners before it was eventually sold to Bright, says The Guardian.

Weetabix was established in 1932 and its portfolio comprises the Weetabix brand, Alpen, Ready Brek and Weetos. Other brands owned by Post Holdings include Shredded Wheat, Bran Flakes and Fruity Pebbles.

It said it still expects 2017 adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $920 million to $950 million, excluding any contribution from Weetabix.

The British company's total sales dropped 1.6 per cent previous year, and profit fell 15 per cent to 84.6 million pounds.

"This is a part of our internationalisation strategy".

It is Britain's second biggest maker of breakfast cereals and cereal bars after Kellogg, employs around 2,000 people and generates annual sales of £346 million. Weetabix said the deal would allow it to continue growing.

At the time the deal was the largest overseas acquisition by a Chinese company in the food and beverage sector.

'UK-listed Associated British Foods was rumoured to have been interested in a deal [for Weetabix], but any domestic buyers would have had to overcome the headwind of the pound's reduced buying power'.

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