Weetabix confirms sale to Post Holdings in £1.4bn deal

Weetabix ceo Giles Turrell 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 great tasting nutritious products for the whole family. I’m confident they will help us open doors for continued expansion.”​

‘Continued expansion’​

The deal came after Weetabix’s UK market share for cereals and drinks increased from 15.3% to 16.4% over the past year. Its brands include Weetabix, Weetabix Minis, Alpen, Weetos, Ready Break, and its new Weetabix On The Go Breakfast Drink.

An industry expert told FoodManufacture.co.uk that Bright Food’s sale of Weetabix was a good financial exit, after it failed to break into the Chinese market. The £1.4bn price tag was a good deal for the Chinese owner of Weetabix, the expert said.

“Looks like a big price but opportunities in the breakfast cereals market for players like Post, who are committed to that sector, are few and far between so they had to pay what it took to get it in an auction,​” ​the expert said.

“There is still a lot of money out there looking for a home and the UK is a very attractive market with the best retailers in the world and a heavily concentrated population.”​

‘A lot of money out there’​

Bright Food acquired a 60% stake in Weetabix in 2012 for £1.2bn, in what was the largest overseas takeover by a Chinese company at the time. It wanted to invest in the long-term development of Weetabix, especially in Asia.

Reports had suggested​ that Post Holdings had bought Weetabix, before the UK cereal manufacturer confirmed the deal today (April 18).

Meanwhile, Weetabix’s sale came after it invested £30M to expand its UK and international brands in January. Turrell said at the time Weetabix doubled its business to China last year, and there was a growing demand for high quality, imported British foods.

But, Weetabix also warned of rising product prices, arising from the weak value of sterling, boosting ingredient prices. Costs were going up because wheat is priced in dollars.