China’s Bright Food will take control of breakfast cereal maker Weetabix, beloved by generations of Irish children, in the biggest foreign acquisition by a Chinese food group.
State-owned Bright Food has agreed to buy a 60% stake in a deal which puts a value of € 1.4bn, including debt, on the private-equity owned company.
The Shanghai-based group has been on the acquisition trail, seeking to raise its profile and cater for its rapidly growing home market. Weetabix is its second foreign purchase in a year and its first in Europe.
Weetabix is Britain’s second-biggest maker of breakfast cereals and cereal bars after Kelloggs. Its brands include Alpen muesli and Ready Break.
Bright Food chairman Wang Zhongnan said: “As China’s leading food group, we are pleased to become the controlling shareholder of Weetabix.”
Private equity owners Lion Capital and Weetabix management will keep a 40% stake.
Bright Food sees a big opportunity for Weetabix in China, where breakfast is a very important meal and there is a trend towards healthy eating.
Analysts expected more deals would now follow in Europe after its earlier failed bids to buy Britain’s private-equity owned United Biscuits, the McVitie’s and Hula Hoops group, and a stake in French yoghurt firm Yoplait.
Paris-based lawyer at De Pardieu Brocas Maffei, Ghislain de Mareuil, said this was the beginning of a trend. “What Bright Food has done will definitely set a trend for other Chinese food companies the way we have seen in the automotive industry,” he said.
Weetabix had sales of over £460m (€566m) in 2011 and employs around 1,800 people.