Post Holdings nears deal to acquire Weetabix for $1.76bn
American cereal manufacturer, Post Holdings is reportedly close to an agreement to acquire UK-based cereal company Weetabix for $1.76bn.
Four bidders had lined up to buy Weetabix since January which includes Associated British Foods, Cereal Partners Worldwide and Barilla, reported the Reuters.
Reports were that the Italian pasta maker Barilla was the frontrunner among the four, bidding about £1.5bn. However, now the Minnesota-based Post Holdings has emerged as the main contender, inching towards the acquisition of its rival cereal company.
There were also reports of Nestle, General Mills and PepsiCo, all showing their interest to buy Weetabix as they have cereal products in their respective portfolios. However, cereal giant Kellogg’s was denied the opportunity to bid on the basis of competition violations.
Chinese firm Bright Food is currently holding the controlling stake in Weetabix which it has been exploring to divest it since last year.
Bright Food had bought a 60% equity stake from Lion Capital in the British cereal company in 2012 with the deal valuing the latter at £1.2bn.
The original owner of Weetabix is the Weetabix family which sold its ownership stake to Lion Capital for £642m in 2004.
Weetabix was founded in 1932 when it was known as the British and African Cereal company. Since then, it has worked its way to become one of the leading producers of breakfast cereals and cereal bars in Britain.
The 2012-deal made by Bright Food to acquire Weetabix was made with the intention to introduce the British cereal brand in China.
Weetabix saw its UK revenues go down gradually in relation to the change in food habits of British consumers, as reported by The Financial Times.
Image: Post Holdings may acquire cereal maker Weetabix for $1.76bn. Photo: courtesy of Praisaeng/Freedigitalphotos.net.