Pasta firm Barilla may reportedly buy UK cereal giant Weetabix for £1.5bn
Italian pasta maker Barilla is reportedly the frontrunner to acquire UK based cereal company Weetabix for £1.5bn.
Weetabix’s controlling stake is currently owned by Chinese firm Bright Food which decided to offload the cereal business last year.
For this purpose, Bright Food had entrusted the job to Goldman Sachs to help it offload a 60% stake in the cereal company, reported This is Money.
The remaining 40% in Weetabix is held by Baring Private Equity Asia which bought the stake from the cereal company’s former owner Lion Capital in 2016.
It was from Lion Capital that Bright Food had bought the 60% stake in Weetabix in 2012 in a deal that valued the company at £1.2bn.
Founded in 1932 under a different name of British and African Cereal, Weetabix has gone on to become one of the major producers of breakfast cereals and cereal bars in the UK. Bright Food had bought its controlling stake with the intention of taking the cereal brand in its home country China.
While Weetabix did double in its revenues in China as per Bright Food in 2016, in the UK where it accounts to nearly 84% of its overall revenue, the numbers fell down gradually owing to changing food habits in the region, reported the Financial Times.
Weetabix’s previous owner, the US based Lion Capital had bought it from the Weetabix family for £642m in 2004.
Apart from Barilla, the other bidders to buy Weetabix include Nestle, General Mills and PepsiCo which all have products related to cereals. On the other side, Kellogg’s, the major cereal company could not bid for its rival cereal maker on grounds of competition violations.