Bright Food sells its majority stake in Weetabix
April 24, 2017 Category Mergers & Acquisitions, Weekly
Shanghai-based food conglomerate Bright Food Group Co has confirmed it will sell the majority of its stake in UK brand Weetabix to U.S. cereal company PostHoldings. The sale is projected to be worth USD1.76 billion. Bright Food will remain as a stakeholder in the brand and continue to help it expand in the Chinese market, according to the company. “The move will help Bright Food better leverage its financial and human resources for its globalization strategy,” said Pan Jianjun, Spokesman for the state-owned conglomerate, which has made several acquisitions globally in recent years. Bright Food acquired a 60% stake in private equity firm Lion Capital in 2012 for GBP1.2 billion, making it the largest overseas deal made by a Chinese company in the food and beverage sector worldwide at the time. Weetabix’s overall sales declined by 1.6% to GBP346 million by the end of 2015. The UK market accounted for more than 80% of its sales. Pan denied that the sale was due to the stagnant performance of the brand, adding that China has become the third-largest market for Weetabix in the five years since the acquisition. Statistics from Nielsen showed that sales of ready-to-eat cereals dropped at a combined annual growth rate of 1.5% from 2009 to 2014, while sales of overall breakfast foods are growing. Among Chinese consumers aged from 20 to 49 and interviewed by the consultancy in 2016, 67% opted for Chinese traditional breakfast foods like noodles or dumplings instead of Western foods, the China Daily reports.
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