The state-owned Chinese firm Bright Food has announced that it has bought a 60% stake in cereal-making Weetabix Food Group.
Bright Foods has acquired control of the group from private equity group Lion Capital, which kept a 40% share in Weetabix Food Group in a deal that values the firm at £1.2bn including debt.
The Chinese firm has ambitious plans to increase sales of Weetabix and group’s other brands Alpen and Ready Brek, by expanding into Asia.
Bright Foods already owns four major food and drinks brands in China and has more than 3,300 retailing outlets including NGS Supermarket, Shanghai First Provisions Store and a number of convenience stores.
The company has actively sought to acquire major food manufacturers in the West given that it already has the retail portfolio to sell to a burgeoning middle class in China.
There is a demand for western foods within developing nations as China as its people look to emulate the tastes that have long been associated with affluence.
The controlling stake in Weetabix Food Group, which is produced in Burton Latimer, Northamptonshire, marks Bright Foods’ first major European acquisition after it failed in its attempt to purchase another UK-owned food brand, United Biscuits, which makes Jaffa Cakes and Hula Hoops, last year.
Weetabix Food Group CEO Giles Turrell said that Weetabix, which is currently the second largest cereal manufacturer in the UK, is an attractive proposition to investors because of its varied portfolio that includes cereal bars and other snack items.
“While the company’s focus has been on reinforcing and building on our position in the UK I believe there are also substantial opportunities to further grow the business internationally, in North America, Asia and beyond,” he said.
Gavin Dadley, deputy Midlands divisional officer at Usdaw was concerned about the safety of UK jobs after the takeover by the Chinese firm but has been left reassured by the statement from the new owners.
“Usdaw is encouraged by the positive statement from Bright Foods that indicates a strong desire to grow and develop Weetabix into a global brand.”