China’s Bright Food has snapped up a 60% stake in Weetabix, in a deal valuing the cereal business at £1.2bn.
Lion Capital, which bought Weetabix in 2004, will hang on to the remaining 40% stake.
Bright said it was committed to growing Weetabix internationally, adding that there was a growing appetite in China for packaged and convenient healthy foods.
“We are excited by the many growth opportunities for the business, especially in international markets, and Asia in particular,” said Bright chairman Zongnan Wang.
“The company has an excellent portfolio of brands, including Alpen and Ready Brek. With its best-in-class production standards and excellent track record for innovation, the business is poised to achieve strong and sustainable long-term revenue and profit growth.”
Weetabix chief executive Giles Turrell added: “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.”
Commenting on the sale, Lion’s Lyndon Lea said: “Over the eight years that we have owned Weetabix it has generated top-line growth that has outpaced the broader cereal market as a result of increased investment behind the brands and innovation. We are excited to continue our journey with the Weetabix brand, which has been an enormously successful investment.”
The deal marks a first major M&A success for Bright in the West. It has previously failed to conclude deals with United Biscuits, US vitamin maker GNC and Yoplait. However, as reported in The Grocer last week, Bright was determined and well-placed to conclude a big acquisition.
“Bright is not at all flaky,” a City source said. “It has substantial financial resources not immediately apparent from the outside, is dedicated and efficient in getting things done, and open and flexible in negotiations.”
Bright was advised in the Weetabix deal by Rothschild, which acted for the company in 2010 when it attempted to buy United Biscuits.
The deal is expected to be concluded in the second half of 2012 subject to approvals by regulators and the Chinese government. Bright is part-owned by the Shanghai municipal government.