China's Bright Food buys Weetabix

Discussion in 'China' started by cir, May 3, 2012.

  1. cir

    cir Senior Member Senior Member

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    Thu May 3, 2012 9:04am EDT

    * Largest overseas deal by a Chinese food group

    * Weetabix will bring healthy mix to Bright Food

    * Deal value Weetabix group at 1.2 billion pounds


    By Samuel Shen and David Jones

    SHANGHAI/LONDON, May 3 (Reuters) - China's Bright Food will take control of breakfast cereal maker Weetabix, beloved by generations of British children, in the biggest foreign acquisition by a Chinese food group.

    State-owned Bright Food has agreed to buy a 60 percent stake in a deal which puts a value of 1.2 billion pounds ($1.94 billion), including debt, on the private-equity owned company that coined the slogan "Have you had your Weetabix today?"

    The Shanghai-based group has been on the acquisition trail, seeking to raise its profile and cater for its rapidly growing home market. Weetabix is its second foreign purchase in a year and its first in Europe after other deals fell through.

    Eighty-year-old Weetabix is Britain's second biggest maker of breakfast cereals and cereal bars after Kellogg.

    Its brands include Alpen muesli and Ready Break as well as Weetabix, which lays claim to being Britain's No. 1 breakfast cereal for under-5s and is made from wheat grown within 50 miles (80 km) of its base in southern England.

    "As China's leading food group, we are pleased to become the controlling shareholder of Weetabix," Bright Food chairman Wang Zhongnan said in a statement on Thursday. "Weetabix has an excellent product portfolio, including leading British cereal brand Weetabix and other category-leading brands."

    Private equity owners Lion Capital and Weetabix management will keep a 40 percent stake.

    The quintessentially British breakfast cereal group was founded in 1932 by the secretive George family and soon producing its iconic bricks of wheat. It was bought by a private equity firm in 2004.


    HEALTHY EATING

    Bright Food now sees a big opportunity for Weetabix in China, where breakfast is a very important meal and there is a trend towards healthy eating.

    The group, which makes "White Rabbit" candy, bought majority stakes in Australia's Manassen Foods and New Zealand's Synlait Milk over the past two years.

    Analysts expected more deals would now follow in Europe after its earlier failed attempts to buy Britain's private-equity owned United Biscuits, the McVitie's and Hula Hoops group, and a stake in French yoghurt firm Yoplait.

    "This is a trend," said Ghislain de Mareuil, a Paris-based lawyer at De Pardieu Brocas Maffei. "In China, you have to set an example, and then others follow. What Bright Food has done will definitely set a trend for other Chinese food companies the way we have seen in the automotive industry."

    Weetabix had sales of over 460 million pounds in 2011 and employs around 1,800 people.

    It has around 7 percent of the British breakfast cereal market. As well as Kellogg, it competes with the Swiss based joint venture Cereal Partners between Nestle and General Mills whose brands include Shreddies and Cheerios.

    Weetabix was sold by the George family for 642 million pounds in 2004 to U.S. private equity firm Hicks Muse Tate & Furst, which later restructured and spun out its European buyout arm to form Lion Capital.

    The deal is expected to close in the second half of 2012 and is subject to Chinese regulatory approval.

    Banking group Rothschild and lawyers Linklaters advised Bright Foods on the transaction.

    Bright Food has four subsidiaries listed on the Shanghai Stock Exchange: Shanghai Jinfeng Wine Co, Shanghai Haibo Co, Shanghai Maling Aquarius Co and Bright Dairy & Food Co.

    UPDATE 2-China's Bright Food buys Weetabix | Reuters
     
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  3. BangersAndMash

    BangersAndMash Regular Member

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    My father worked 20 years for Weetabix (retired now) and I know dozens of Indians who still work there!
     
  4. satish007

    satish007 Senior Member Senior Member

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    India and China bhai bhai, sad Chinese have to buy food companies. because local food producers have had very bad reputation. Many Chinese would rather get much expensive import food than reasonable local food. that's good move. That's a good way for Chinese local food companies.
     
  5. panduranghari

    panduranghari Senior Member Senior Member

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    Why do local Chinese have a bad reputation? Is it like India where they contaminate foods to increase bulk?
     
  6. cir

    cir Senior Member Senior Member

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    Weetabix nationalised:rofl:... by China: Communist state snaps up another British brand
    By Sean Poulter

    PUBLISHED: 20:36 GMT, 3 May 2012 | UPDATED: 07:50 GMT, 4 May 2012

    Comments (102) Share

    Weetabix, the breakfast cereal produced in Britain since 1932, has effectively been sold to an arm of the Chinese state.

    Bright Foods, which is run by the council responsible for the city of Shanghai, is paying £720million for a 60 per cent controlling stake in the company.
    The cereal manufacturer, based in Northamptonshire, was family

    The Chinese hope to boost sales of Weetabix – based on its credentials as a healthy product – in China, across Asia and in North America.

    Currently, the Chinese do not have Western-style breakfast cereals and are more likely to eat savoury rice dishes or deep fried dough, but the nation's wealth is bringing a change in diet.

    The purchase by Bright Foods is the latest evidence of how the fabulously wealthy Chinese government and its agencies are looking to snap up iconic British businesses.

    Last week it emerged that the British sports car firm Lotus is under threat of being sold to China, putting 1,400 UK jobs at risk.

    Its Malaysian owners, the industrial conglomerate DRB-Hicom, has appointed city firm KPMG to find a potential Chinese buyer, MPs have been told.
    In January, the Chinese government's sovereign wealth fund, China Investment Corporation, bought an 8.7 per cent stake in Thames Water. Although Weetabix has been part of British daily life for decades, the original concept for the whole-grain wheat breakfast cereal was developed in the 1920s by Bennison Osborne in Australia.

    In 1930 Mr Osborne and his partner Malcolm Macfarlane sold the Australian and New Zealand rights for what they called 'Weet-Bix' to the Sanitarium Health Food Company.

    They then formed another company which began manufacturing in the UK at Burton Latimer, near Kettering, Northamptonshire, in 1932. They renamed the product Weetabix for the British market.

    The cereal is still made at Burton Latimer, and there is another factory in Ontario, Canada, serving the north American market.

    The Weetabix Food Company, which also owns the Ready Brek and Alpen brands, is the UK's second biggest cereal manufacturer.

    It exports to more than 80 countries, employs nearly 2,000 people and generates annual sales of more than £420million.

    The Weetabix cereal alone accounts for 7 per cent of the UK's cereal sales, with annual figures of £100million.

    Zongnan Wang, chairman of Bright Foods which has annual sales of £7.5billion, said the plan is to invest in the Weetabix brand and build sales around the world.

    But the company's staff will want reassurances that production will remain in the UK.

    The transaction is subject to regulatory and government approvals in China, but completion of the deal is expected later in the year.

    Read more: Weetabix, the next Chinese takeaway: With Lotus in its sights, China snaps up another UK brand | Mail Online
     
  7. panduranghari

    panduranghari Senior Member Senior Member

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    In another post you were claiming why bother with intellectual property issues and now you are celebrating the buying of Weetabix and Lotus. You do know that the factory will still be in the UK? They wont allow you to manufacture weetabix in China and ship it into the UK for sale? Also could the Brits double cross you? Sell Lotus for a price but not allow production to move overseas?
     
  8. J20!

    J20! Senior Member Senior Member

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    What? Of course a factory would be opened in China. Didn't you read the article at all? "The Chinese hope to boost sales of Weetabix – based on its credentials as a healthy product – in China, across Asia and in North America." It wouldn't be logistically efficient to produce enough product to satisfy the whole Asian market then ship it all from the UK. Use common sense man. And you say it as if once a controlling interest in a company is sold its original makers somehow still have a say.
    Once bought, there is really nothing the British could do to stop factories being established in China. And WHY WOULD THEY even if they could? Don't be bitter. Lotus's main owners are Malaysian, not British.
     

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