Noble Foods sale to complete this month

The UK’s biggest egg company, Noble Foods is about to be broken up following the enforced sale of a business it has only just acquired.

Noble Foods was formed in late 2006 by the merger of Deans Food Group and Stonegate Farmers, creating a business controlling almost half of the UK’s egg production.

However, the Competition Commission argued that the merger would lead to a lessening of competition and last year ordered Noble to sell Stonegate’s parent company Clifford Kent Holdings.

Talks have been progressing for several months, but a source close to the negotiations this week said: “The deal is set to complete by the end of March.”

Deans was roughly three times the size of Stonegate prior to the merger, with annual sales of £314M against £103M.

The source declined to comment on how much the Stonegate sale was likely to raise, but uncertainty over feed costs - the biggest input cost in egg production - are believed to have made it difficult to define an appropriate price. Insiders had hoped the sale would be clinched at the end of February.

Egg prices have rocketed in recent months on the back of rising feedstock prices. Egg production has been hit particularly hard as the cost of feed represents a larger proportion of overall costs compared with livestock such as beef cattle, according to the British Egg Information Service.