Weetabix has been sold to US cereal company Post Holdings for US$1.76bn despite previous reports that Associated British Foods plc (LON:ABF) was seeking a takeover.
China’s Bright Food put its 60% stake in the cereal brand up for sale in January and Primark retail chain to Silver Spoon sugar firm ABF was said to be among the potential bidders. Italy’s Barilla and Cereal Partners, a joint venture between Nestlé and General Mills, were also said to be eyeing up an acquisition of Weetabix.
Post Holdings - the third largest cereal company in the US - will add Weetabix to its brands, which includes Golden Crisp, Cocoa Pebbles and Great Grains.
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Bright Food bought a majority stake in the cereal firm for £1.2bn in 2012 but it is understood the company struggled to build market share in China where consumers prefer hot, savoury and rice-based breakfasts.
Private equity firm Lion Capital sold its remaining holding to Baring Private Equity Asia in 2015 for an undisclosed amount.
Weetabix’s revenues of £346mln in 2015 were 2% lower than in 2012 and its pre-tax profit fell by 1% to £94.3mln.
The deal marks the latest in a raft of foreign takeovers of UK companies after the Brexit vote last June. A weaker pound following the UK’s vote to leave the European Union has made investments more attractive to international investors.