Biscuit firm in €2.4bn takeover

McVitie’s and Jacob’s owner United Biscuits agreed today to a £1.6bn (€2.4bn) takeover by two private equity firms.

The company, which was founded in 1948 and employs 7,500 people in the UK, will be bought by The Blackstone Group and PAI.

The deal is subject to clearance by the European Commission and consent of the UK Pension Regulator.

A spokeswoman for UB said today she expected it to be "business as usual" for employees following the takeover.

PAI already holds a stake in UB and now becomes a 50% shareholder, with Blackstone taking on the other half as part of the deal.

UB investors Cinven and MidOcean Partners will no longer have any involvement, but said today their interest in the firm had generated returns of 2.2 times the cost of investment.

In July, US food giant Kraft paid £575m (€858m) to acquire the southern European arm of the business, which covers Spain and Portugal.

Malcolm Ritchie, UB chief executive, said: “Blackstone has a successful track record of owning and developing companies such as UB and I believe the company will benefit from their involvement. I am delighted PAI has decided to remain a shareholder and participate in the next phase of the company’s development.”

UB was founded in 1948 following the merger of two Scottish family businesses - McVitie & Price and MacFarlane Lang. In 1960 UB added to its portfolio with the acquisition of Crawford’s Biscuits and MacDonald’s Biscuits.

In September 2004 it bought the Jacob’s Biscuit Group from Danone and in February the company signed a deal to gain control of the Nik Naks and Wheat Crunchies brands from Golden Wonder.

The firm runs operations across the UK, including Jacob’s factories in Aintree and Leicester, KP plants in Rotherham and Ashby de la Zouch, as well as McVitie’s sites in Carlisle and Manchester.

UB enjoyed a boost in profits during the first quarter of this year – up 26% to £38.8m (€58m) compared with £30.6m (€46m) during the same period in 2005.