Weetabix sold to American cereal giant in £1.4bn deal
WEETABIX, one of Britain’s most popular cereals, is being gobbled up by US cereal giant Post Holdings in a £1.4billion deal.
Weetabix has been bought by US cereal giant Post Holdings
The breakfast favourite, made in the UK since 1932, was put up for sale earlier this year by China’s Bright Food, which bought a majority stake in 2012.
It struggled to build a market share in China despite growing sales there, with consumers preferring a traditional hot, ricebased breakfast.
Post, which makes Grape-Nuts and Honey Bunches of Oats, has agreed to set up a joint venture with Bright Food to manage the Weetabix China operations.
Weetabix, whose brands include Alpen, Ready Break and Weetos, has a UK market share of over 16 per cent for cereals and drinks.
It also exports to more than 90 countries and operates across North America, South Africa, Kenya, Germany and Spain.
Mel B and Weetabix - Morning Mayhem
The deal for one of Britain's most popular brands was worth £1.4bn
Weetabix chief executive Giles Turrell, who will take on the newly- created role of chairman, said the deal is “great for the team at Weetabix and all those who love our brands”.
I’m confident they will help us open doors for continued expansion
He added: “The past five years have seen us increase branded sales at home and overseas. Post is a leader within its markets and shares our commitment to great-tasting nutritious products.
“I’m confident they will help us open doors for continued expansion.”
Post said the combination would open cross-selling through expanding Post products in select international markets and boosting Weetabix in North America.
Weetabix boss Giles Turrell described the deal as 'great for the team at Weetabix'
Post chief executive Rob Vitale said: “We have long admired Weetabix as a leader in cereal and it will be a strategic fit in Post.
“This continues our strategy of strengthening our portfolio and diversifying.”
Weetabix is expected to contribute £120million of adjusted annual pre-tax earnings before cost savings, which are set to be about £20million a year three years after the deal completes.
Hargreaves Lansdown’s George Salmon said: “Weetabix has struggled to crack the Chinese market, so it is no surprise to see Bright Food sell up. It’s also unsurprising to see a UK brand stay in foreign hands, due to the weak pound.”