Most Important Deal of the Day: Post Holdings Acquires Weetabix
Following months of speculation, it was confirmed last week that US cereal giant Post Holdings is to acquire British cereal company Weetabix in a deal worth £1.4 billion.
Rumours of acquisition started after Weetabix owners Bright Food and Baring Private Equity Asia put the business up for sale earlier this year. It follows what has been a hugely successful year for Weetabix in which its grew UK market share for cereals and drinks from 15.3 per cent to 16.4 per cent.
A firm favourite at the British breakfast table since 1932, the Weetabix portfolio includes Alpen, Ready Brek, Wheetos and, of course, the Weetabix brand, all of which are exported to 80 countries around the world.
China’s Bright Food’s bought a 60 per cent stake in Weetabix in 2012 and although sales in China doubled in 2016, it appeared Weetabix struggled to build significant market share due to consumer preference for hot, rice-based breakfast rather than cold cereal.
Headquartered in Missouri, Post Holdings is the third largest cereal firm in the US with a portfolio of well-known brands including Great Grains, Golden Crisp and Cocoa Pebbles. The company’s president and chief executive Rob Vitale commented on the Weetabix acquisition: “We have long admired Weetabix as a leader in cereal and believe it will be a fantastic strategic fit within Post. Combining two category leaders continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally.”
Giles Turrell, chief executive at the Weetabix Food Company said: “Today’s deal is great news for the team at Weetabix and all those who love our brands. The past five years have seen us increase our branded sales at home and overseas. Post is a leader within its markets and shares our commitment to providing the great tasting nutritious products for the whole family. I’m confident they will help us open doors for continued expansion.”
The deal is expected to close in the third quarter of 2017.
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