The Chinese owner of Weetabix is selling the iconic cereal firm to US company Post Holdings for £1.4bn, giving the latter full control over some of the world's most popular breakfast foods.
Post said that the acquisition from Bright Food Group would help it to establish a platform in the UK.
“We have long admired Weetabix as a leader in cereal and believe it will be a fantastic strategic fit within Post,” Rob Vitale, Post’s president and chief executive, said. “Combining together two category leaders continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally,” he added.
Giles Turrell, CEO of Weetabix, said he welcomed the news too.
“The past five years have seen us increase our branded sales at home and overseas,” he said.
“Post is a leader within its markets and shares our commitment to providing great tasting nutritious products for the whole family. I’m confident they will help us open doors for continued expansion,” he added.
Back in January, Reuters reported that Post was among four bidders vying for Weetabix, the other bidders being Associated British Food, Cereal Partners Worldwide and Italian pasta maker Barilla.
Northamptonshire-headquartered Weetabix, which also makes Alpen cereal, Weetos and Oatibix, dates back to 1932 and was family owned until 2003.
In 2012, Shanghai-headquartered Bright Foods bought a majority stake in the brand, but in December last year the owners reportedly hired banks to lead a sales process.
Analysts say that Bright Foods had hoped that Weetabix would help it crack the lucrative Asian market, but while China now represents Weetabix's third-largest market, most of its sales still come from its much slower-growth home market.
Weetabix also has operations in North America, South Africa, Germany and Spain and is the majority owner of a joint venture in Kenya that serves the African market.
Post on Tuesday said that when the transaction closes, Sally Abbott, Weetabix’s director of marketing, will become managing director of Weetabix UK and Ireland and report to Mr Vitale. Mr Turrell will assume the newly created role of chairman of Weetabix.
He will be responsible for overseeing the integration of Weetabix into the Post portfolio.
The deal is expected to be funded with existing cash, as well as borrowing, Post said.
Barclays, Rabobank, Credit Suisse and Nomura have been hired to act as financial advisors to Post and the deal is expected to be completed by the third quarter of 2017.
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