The Feltham-based frozen food firm was put up for sale by private equity firm Permira, which, in turn, owns Iglo. A bid of £2.5bn has been made by Thai food manufacturer CP Foods, according to press reports.
CP Foods is Thailand’s largest food manufacturer, with sales of about £7.5bn. It already has a UK factory in Newmarket, Suffolk supplying own-label foods for supermarkets such as Tesco and a site in Hartlebury, Worcestershire.
Julian Wild, food group director at legal firm Rollits, told FoodManufacture.co.uk: “Far Eastern buyers view the UK as an attractive place in which to acquire business because the regulatory requirements are less rigid, which makes it relatively easy to do business.”
Bright Food
The latest bid comes after British cereal maker Weetabix was bought by China’s Bright Food earlier this month, in a deal that valued the firm at £1.2bn.
This followed the acquisition of UK duck company Cherry Valley by the Thai company Bangkok Ranch for an undisclosed sum in April. Md of the Lincolnshire-based firm, Richard Bird, said the sale would bring more jobs and investment into the Grimsby area.
CP Foods is reported to be keen to expand Birds Eye into regions outside central Europe where the frozen market has room to grow.
This reflects the eastern world’s increasing desire for western convenience food as it becomes wealthier and acquires a more global perspective through travel.
Wild said: “As eastern tastes become more aligned with western ones, this will open up markets outside central Europe.
Recent deals
“There’s still huge potential for developing westernised products in the Far East, which is why some of the recent deals are being done. As eastern tastes become more developed and closer to western tastes, there’s greater opportunity for food manufacturers.”
Private equity houses such as Bain Capital, BC Partners, Blackstone and PAI Partners are also said to have been eyeing up Iglo.
Wild said: “I, personally, thought the Iglo group was more likely to go a private equity firm, and this might still be the case.”
When questioned about reports of the bid, CP Foods said it was: “ … unable to comment on the bid at this time”. Birds Eye also declined to comment.
The UK frozen food market increased in volume by 2.5% in 2010. Total value was £4,279M. Birds Eye was a top player with 7.7% of market share, followed by McCain at 6.9% and Findus Group at 4.1%.