By Mark Kleinman, City Editor
One of China's biggest food companies is poised to take full control of Weetabix, the UK's second-biggest breakfast cereal producer, in a deal worth hundreds of millions of pounds.
Sky News understands that Bright Food, which bought a 60% shareholding in Weetabix in 2012, is preparing to acquire most of the 40% of the company it does not already own.
If it proceeds, the transaction will hand full ownership of brands such as Alpen, Ready Brek and Weetos to Bright Food, underlining a growing trend of takeovers of prominent Western brands by Chinese companies.
The majority of the remaining shares are held by Lion Capital, a private equity group, which took control of Weetabix a decade ago, ending seven decades of family ownership.
As part of the deal that saw Bright Food become the cereal maker's majority investor, Lion and the Chinese company agreed put and call options allowing the transfer of the rest of the shares two years after the original deal completed.
Although Bright Food's investment was announced in May 2012, it did not legally complete until November that year, meaning the window for the remainder of the takeover will open next month.
Bankers said that Lion was likely to pursue the sale of its Weetabix shares shortly after that window opened, although they cautioned that it had not yet been formally agreed.
Weetabix is one of the most popular food brands in the UK, having been founded in 1932 and subsequently expanding to more than 80 countries around the world.
Run by Giles Turrell, its chief executive, the 2012 takeover by Bright Food valued Weetabix at £1.2bn.
Employing around 1,800 people, the Northamptonshire-based company made a pre-tax profit of £68m in the last year for which results are available.
Its backing from Bright Food has spurred plans for the launch of product variants such as green tea-flavoured Weetabix targeted at Chinese consumers for who breakfast cereals are not part of a conventional daily diet.
Although the company is performing well, it told employees earlier this year that it planned to scrap a planned 2.5% pay rise amid a cost reduction drive triggered by pressure from supermarket own-brands and discount rivals.
Bright Food and Lion have continued to work together on other prospective partnerships, exploring a £2bn bid for United Biscuits earlier this year before deciding not to proceed.
One of the remaining bidders for UB is Kellogg, the US cereal producer which is Weetabix's only bigger competitor in the UK market.
Weetabix and Lion Capital declined to comment.
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