Weetabix 'set to be sold to United States firm'

Weetabix 'set to be sold to United States firm'

When Bright Foods bought Weetabix, it had hoped the cereal would become popular in China as part of a general trend towards more western eating habits.

Goldman Sachs ran the sale process for Bright Food.

Bright Food acquired a 60 percent stake in private equity firm Lion Capital in 2012 for 1.2 billion pounds ($1.51 billion), making it the largest overseas deal made by a Chinese company in the food and beverage sector worldwide back then.

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

Post Holdings said that it has agreed in principle to establish a joint venture with Bright Food Group and an investment fund advised by Baring Private Equity Asia to manage the Weetabix China operations.

Its stable of products includes "Alpen, the No1 muesli brand in the UK, Ready Brek, Barbara's and Weetos". It estimates those savings to reach 20 million pounds per year by the third full fiscal year after the deal is completed.

This latest deal "affords Post a truly iconic brand", says Post CEO Rob Vitale, they report.

Post Holdings said that the deal will allow it to grow its USA brands internationally and expand Weetabix in North America.

It floated the idea of listing Weetabix in 2014, but the brand never gained enough traction in a country where consumers traditionally eat hot breakfasts like congee.

After purportedly struggling to build a market share in China, the Shanghai-based company put the British company up for sale in January. "It's also unsurprising to see a United Kingdom brand stay in foreign hands, due to the weak pound".

In contrast, the dollar's recent strength has helped the successful bidder, U.S. consumer group Post Holdings.

Associated British Foods and Cereal Partners and Italian pasta maker Barilla had been named as other potential suitors for the food company.

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