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Weetabix sold to US firm after cereal fails to catch on at breakfast in China Weetabix sold to US firm after breakfast cereal fails to catch on in China
(about 1 hour later)
UK cereal brand Weetabix is to be snapped up by the US company Post Holdings in a deal worth about $1.8bn (£1.4bn). UK cereal brand Weetabix is to be snapped up by the US company Post Holdings in a deal worth £1.4bn.
The breakfast cereal favourite, made in Britain since 1932, was put up for sale in January by China’s Bright Foods which took a majority stake in 2012. The breakfast cereal favourite, made in Britain since 1932, was put up for sale in January by China’s Bright Food which took a majority stake in 2012.
Weetabix is made in the small town of Burton Latimer, near Kettering, Northamptonshire, and will become part of America’s third-largest cereal company. Other brands owned by Post Holdings include Shredded Wheat, Bran Flakes and Fruity Pebbles.Weetabix is made in the small town of Burton Latimer, near Kettering, Northamptonshire, and will become part of America’s third-largest cereal company. Other brands owned by Post Holdings include Shredded Wheat, Bran Flakes and Fruity Pebbles.
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. However, while sales of Weetabix have risen in China, market share has disappointed as traditional rice and steamed bread remain popular breakfast staples. The Weetabix portfolio includes Alpen, the No1 muesli brand in the UK, Ready Brek, Barbara’s and Weetos. The company employs about 1,800 people globally, and while it has some overseas manufacturing plants, all of the wheat that goes into Weetabix biscuits is grown within 50 miles of its base in Burton Latimer.
The UK accounts for the majority of Weetabix sales and the brand is a royal warrant holder. It was family-owned until 2004, when it was bought by a Texas private equity firm. It was later sold to another private equity firm, Lion Capital. When Shanghai-based Bright Food bought Weetabix, it had hoped the cereal would become popular in China as part of a general trend towards more western eating habits. However, while sales of Weetabix have risen in China, market share has disappointed as traditional rice and steamed bread remain popular breakfast staples.
Weetabix is exported to more than 90 countries but the UK accounts for the majority of sales and the brand is a royal warrant holder. It was family-owned until 2004, when it was bought by a Texas private equity firm. It was later sold to another private equity firm, Lion Capital.
Other potential suitors interested in Weetabix were thought to have included the UK’s Associated British Foods, Cereal Partners Worldwide and Italian pasta maker Barilla.Other potential suitors interested in Weetabix were thought to have included the UK’s Associated British Foods, Cereal Partners Worldwide and Italian pasta maker Barilla.
Confirming the deal on Tuesday, Post’s president and chief executive, Rob Vitale, said: “We have long admired Weetabix as a leader in cereal and believe it will be a fantastic strategic fit within Post.
“Combining together two category leaders [Alpen] continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally. We are excited about the growth opportunities that this acquisition brings.”
Post said it had agreed to establish a joint venture with Bright Food and an investment fund advised by Baring Private Equity Asia to manage the Weetabix China operations.