Cereal investor: Weetabix sold for £1.4bn

Cereal investor: Weetabix sold for £1.4bn

The announcement of Bright Foods' intention to sell commenced a bidding war between Post Holdings; Associated British Foods, which owns Jordans cereals; Italian pasta maker Barilla; and Cereal Partners Worldwide, a JV between Nestle and Cheerios producer General Mills. Reuters reported exclusively in December that Bright had hired Goldman Sachs to advise it on a sale.

Post Holdings is buying Weetabix from its owners, Shanghai-based Bright Food Group and Baring Private Equity Asia.

A formal announcement is expected later, the Financial Times said.

He said Weetabix's China sales had risen sixfold in the past year but the company still sells most of its product in Britain, since Chinese consumers are unused to eating cold cereal for breakfast.

Weetabix, whose brands include Alpen, Ready Break and Weetos, has a United Kingdom market share of over 16 per cent for cereals and drinks. Its brands include Great Grains and Golden Crisp.

He also confirmed that Post will seek to make a £20m annual cost saving through "procurement synergies", but would not alter the size or shape of the Weetabix biscuits. It estimates those savings to reach £20 million per year by the third full fiscal year after the deal is completed.

Weetabix, the beloved British breakfast cereal, has officially failed at hawking its wares in China. As part of the deal, Post has made an agreement in principle to establish a joint venture with Bright Food to manage the Weetabix in China operations.

Jonathan Buxton, head of retail and consumer at Cavendish Corporate Finance, said: "Importantly, the 1.8 billion USA dollar takeover of Weetabix will give Post both a significant United Kingdom presence and a greater share of the North American market. Going forward Bright will stick to our overseas push", according to Bright spokesman Pan Jianjun.

Northamptonshire-based Weetabix, which has a royal warrant, was family-owned until 2004, when it was bought by private equity firm Lion Capital.

In the UK, Weetabix is the second-largest cereal maker behind the USA food company Kellogg's.

FoodIngredientsFirst reached out for comment from Weetabix and Post Holdings earlier today but neither was immediately available.

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