ABF's stake in Jordans Cereals will further closer alliance

Jordans expects to benefit from closer buying and promotional partnerships with Associated British Foods (ABF) after ABF’s purchase of a 20% stake in the cereal manufacturer for an estimated £15M.

Jordans said the deal - announced on Friday - was less of a departure than it appeared to be for what is renowned as a self-contained, family firm. In a statement, the company said: “Jordans already work with Twinings on joint promotional activity in France and we see this as a tremendously exciting opportunity to benefit from other synergies and expertise that ABF may offer.

“We have decided that now is the time to bring in a strong partner for the business that shares our commitment to the long-term future of Jordans and to producing high quality natural foods and supporting environmental conservation.”

John Sutcliffe, chief executive of ABF’s grocery division, will occupy a non-executive post on the board of Jordans in the wake of the deal, providing advice and guidance. Jordans communications manager David Webster said: “The main benefits for Jordans will include the input of expertise.” He would not confirm whether the rocketing price of grain had encouraged the closer partnership, which could enable both firms to achieve better distribution and purchasing terms for raw materials. But he said: “There will also be overlaps in buying - ABF owns the Kingsmill bread brand, so there are overlaps with regard to grain buying, for example. We will also benefit from its expertise in distribution.”

Both companies also have strong family ethics, said Jordans communications manager David Webster. Run by chief executive George Weston, ABF is majority owned by the Weston family. Bill and David Jordan will continue to be the majority shareholders in Jordans and remain directly and actively involved in the company as chairman and vice chairman respectively.

In a statement, ABF said: “ABF already has extensive interests and expertise in cereal-based branded foods both in the UK and internationally. It will be a strong partner to ensure the further development of the Jordans business.”

Weston said: “Jordans is a wonderful brand which is positioned well to benefit from the consumer’s growing desire for natural ingredients and healthy eating. I look forward to the development of the brand’s full potential.”