Weetabix offers the Shanghai-based Bright Food company heritage and access to European markets with the potential for growth in Asia, according to analysts. British cereal favourite Weetabix is to come under Chinese ownership after a deal involving the Asian country's biggest overseas food takeover. Shanghai firm Bright Food will take a majority 60% share of the Weetabix Food Company, placing a £1.2 billion value on the cereal giant, while current private equity owner Lion Capital will retain a 40% stake. The deal values Weetabix, which is produced in the small town of Burton Latimer, near Kettering, Northamptonshire, at £1.2bn. Northampton-based Weetabix, which also owns Alpen and Ready Brek, was founded in 1932 and was family owned until 2004 when it was bought by a Texan private equity firm. State-backed Bright Food, which generated revenues of around £7.5 billion last year, is looking to take advantage of China's "growing appetite" for healthy foods and to drive Weetabix's growth across Asia. Zongnan Wang, Bright Food chairman, said:
"With Bright Food's strong resources and our expertise in both the Chinese and broader international markets, we are excellently placed to develop the Weetabix business."
Bright Food in 2010 considered a £2 billion deal to buy United Biscuits, the company behind Hula Hoops and Jaffa Cakes, but the talks fell through. In 2011, Bright Food had revenues of $ 12.2bn. Weetabix Food Company, the UK's second biggest cereal manufacturer, exports to more than 80 countries, employs nearly 2,000 people and generates annual sales of more than £420 million. Lyndon Lea, a partner at Lion Capital, said:
"We are excited to continue our journey with the Weetabix brand, which has been an enormously successful investment, as we extend the business into China in partnership with Bright Food."
The cereal is the latest in a long line of western food groups that have fallen prey to the Chinese. Last year Bright Food bought a 75% stake in Australia's Manassen Food for more than $500m and its dairy business bought a 51% stake in New Zealand diary Synlait. The Weetabix cereal alone accounted for 7% of the UK's cereal sales, with annual figures of £100 million. Weetabix chief executive Giles Turrell said:
"While the company's focus has been on reinforcing and building on our leading position in the UK, I believe there are also substantial opportunities to further grow the business internationally, in North America, Asia and beyond."
The transaction is subject to regulatory and government approvals in China, although completion of the deal is expected in the second half of the year. More information: Jenrick Engineering is a recruitment partner for many of the leading Engineering Corporations within the UK, providing an array of contract and permanent job opportunities for engineers who operate within this sector. If you would like to explore job opportunities in this sector, or wish to seek advice regarding recruiting contractors or permanent staff, please contact our offices at Burton on Trent (on 01283 548 121) or Crick, Northampton (on 01788 824555). Article Source: foodmanufacture.co.uk