China's Bright Food sells Weetabix to US's Post for Dollars 1.8bln

Weetabix launched its high-protein version in a bid to expand sales

Post Holdings is now the third largest cereal firm in the USA, so it is only clear that this acquisition will further cement the company's worldwide presence and market growth across the board, beating General Mills, Nestle and PepsiCo to the deal.

The sale would give Bright extra firepower should it want to bid for any other food assets now on the block.

A formal announcement is expected later, the Financial Times said. "However, while sales of Weetabix have risen in China, market share has disappointed as traditional rice and steamed bread remain popular breakfast staples", observes Angela Monaghan for the Guardian.

Post has agreed in principle to establish a JV with Bright Foods and Barings Private Equity Asia to manage the Chinese operations.

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

It owns brands such as Honey Bunches of Oats, Pebbles, Great Grains, Golden Puffs, Cinnamon Toasters, Oh's, Berry Colossal Crunch and Malt-O-Meal.

Post said it intends to make £20m of cost savings "from procurement synergies, rather than redundancies".

Established in 1932, Weetabix was family-owned until 2004 when it was bought by Lion Capital, the private equity firm.

"This is a part of our internationalization strategy". Weetabix said the deal would allow it to continue growing.

Weetabix remains one of the most popular cereal brands in the United Kingdom since its establishment in Northamptonshire in the 1930s.

Cereal maker Post Holdings Inc. is close to a deal to buy United Kingdom peer Weetabix, a person with knowledge of the matter said.

Pan denied that the sale was due to the stagnant performance of the brand, adding that China has become the third-largest market for Weetabix in the five years since the acquisition.

In the UK, Weetabix is the second-largest cereal maker behind the United States food company Kellogg's. "It's also unsurprising to see a United Kingdom brand stay in foreign hands, due to the weak pound".

Weetabix had earnings before interest, tax, depreciation and amortization (EBITDA) of 130 million pounds in 2016, Reuters reported in December.

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