The country's biggest biscuit maker, United Biscuits, the owner of brands such as Penguin and McVitie's, is to be sold to the private- equity companies The Blackstone Group and PAI Partners for more than £1.6bn.
The pair were the last potential buyers to remain interested after Premier Foods, the owner of Angel Delight and Branston pickle, walked away last month amid concerns that the asking price was too high.
The sale by Cinven and MidOcean Partners, which are also private-equity groups, raised fears for the £320m pension fund deficit at United.
Brian Revell, the national organiser for food and agriculture at the Transport and General Workers Union, said: "Private-equity deals are inevitably struck for quick returns for shareholders. But the T&G's view is that the workforce and their pensions must be taken into account. That's why we believe there should be a cash injection to show this is not a quick-fix deal but a longer term investment."
The T&G has almost 900 members at United, in Rotherham, Halifax and Ashby-de-la-Zouch.
Founded in 1948, united employs more than 9,000 workers, about 7,500 of whom work in the UK.
The purchase will be financed by a combination of equity provided in equal measure by Blackstone and PAI, which is already a shareholder in United, and debt. The debt finance is to be provided by three banks: Barclays, Goldman Sachs and JP Morgan.
Malcolm Ritchie, the chief executive of United, said: "Blackstone has a successful track record of owning and developing companies such as United Biscuits and I believe the company will benefit from their involvement.
"PAI is one of our existing shareholders and we are delighted that they continue to see the great potential of the business and want to remain as shareholders."
Cinven, MidOcean and PAI, together with the US food giant Kraft, bought United in 2001. Cinven and MidOcean owned 30 per cent each; PAI held 15 per cent. This year Kraft, best-known for Philadelphia cheese and Ritz crackers, sold its 25 per cent stake.
Goldman Sachs was appointed in February to handle the sale after Cinven and MidOcean decided to exit.
The sale is subject to approval from the European Commission and the UK pension regulator.
Yesterday's agreement came hours after United said it would shift production of Nik Naks and Wheat Crunchies snacks from Scunthorpe, where they are made under contract, to its own factories in Ashby-de-la-Zouch and Teesside.
Bite-sized biscuit facts
* The first digestive biscuit was created by Alexander Grant, a young McVitie's employee, over 100 years ago.
* McVitie's first chocolate digestive was made in 1925.
* Over 71m packets of chocolate digestives are eaten in the UK each year - 52 biscuits a second.
* A court ruled in 1991 that McVitie's Jaffa Cakes were cakes, not biscuits, and therefore were exempt from Vat.
* More than 16bn Hula Hoops are eaten in the UK each year.Reuse content