Kraft in £575m move for UB unit

Foods giant Kraft was today believed to have struck a £575m (€831m) deal to acquire part of United Biscuits (UB), the UK-based maker of Jaffa Cakes.

The American company, whose brands include Ritz crackers and Philadelphia cheese, is said to have made the move for UB’s southern European business.

The Financial Times said UB’s owners planned to start a new process to sell the northern European division once the deal with Kraft is completed.

Kraft took a 25% stake in UB in April 2000, with the remainder taken by private equity groups Cinven, PAI and MidOcean.

The move is thought to include UB's operations in Spain, where the firm owns seven of the top 10 selling biscuit brands.

UB also commands 39% of the Portuguese biscuit market through its Triunfo brand and already produces Kraft’s Oreo biscuits in Europe under licence.

The company enjoyed a boost in profits during the first quarter of this year – up 26% to £38.8m (€56m) compared to £30.6m (€44m) during the same period in 2005.