Weetabix to be sold to US company Post Holdings
Following the brand's struggle in China, Bright Food Group will sell Weetabix for €1.69bn to US company Post Holding
18 April 2017 | 0
Weetabix cereal company is to be sold by Chinese firm Bright Food Group Ltd to Post Holdings for $1.8bn (€1.69bn), following the brand’s struggles to gain a foothold in the Chinese market.
Acquired in 2012 by Bright Food, the company hoped to expand the cold cereal-based market in China. Despite doubling sales in China in 2016, the UK still accounts for the majority of its sales.
The cereal struggled to catch on in a market which traditionally eats hot breakfasts like congee. The acquisition by Post Holdings is the latest addition to the company’s already diverse cereal brand ownership of Bran Flakes, Shredded Wheats, and Golden Crisp.
“We can see that demand for cereals is growing due to health-consciousness, especially among female consumers exposed to western lifestyles, but Weetabix did not make much inroads, probably because Bright Food does not have experience in this area,” Jiaqi Du, research manager for packaged food at Euromonitor International in Shanghai, said, speaking to Bloomberg.
Speaking with the Financial Times, Rob Vitale, Post’s chief executive said: “It affords Post a truly iconic brand. We tend to use the term loosely, but it fits with the UK’s national heritage and deserves the term. Weetabix sits within a mature market but maintains its status in the world’s second largest cereal market.”
China’s breakfast cereal market was worth $933m (€874m) in 2016, according to Euromonitor, with ready-to-eat cereals like Weetabix accounting for about quarter of the market.
The acquisition of the nearly 85 year-old company is one of a long line of British acquisitions following the UK referendum vote to leave Europe on 23 June 2016.
Thomson Reuters reported that despite Brexit fears, British merger and acquisitions are at their second highest level in eight years. The weaker pound and a drop in valuations made the UK an attractive offering to investment funds and companies.
Weetabix was family owned until 2003 and its Northampshire mill currently exports to over 80 countries and employs around 1,800 people internationally.