U.S. firm set to buy Weetabix

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U.S. firm set to buy Weetabix

St Louis-based Post already owns the likes of Shredded Wheat and Bran Flakes, as well as Grape-Nuts, Raisin Bran, Honey Bunches of Oats and protein brands such as PowerBar.

It will pay nearly $2 billion to buy Weetabix from a Chinese cereal maker.

Alongside the oval-shaped cereal bricks, Weetabix also produces Weetabix Minis, Alpen and Weetos.

This has grown rapidly, with sales of more than £15 million in 2016.

The deal could value Weetabix at about 1.4 billion pounds ($1.76 billion), said the person, who asked not to be identified because the process is private.

The dollar's recent strength and the pound's weakness helped Post fight off competition from Associated British Food and Italy's Barilla to land the breakfast giant.

"There is still a lot of money out there looking for a home and the United Kingdom is a very attractive market with the best retailers in the world and a heavily concentrated population".

Weetabix - made in the United Kingdom since 1932 - was put up for sale in January by China's Bright Food, which bought a 60% stake in 2012. It wanted to invest in the long-term development of Weetabix, especially in Asia.

According to Turrell, Post Holdings will also retain production of Weetabix and other products at the Weetabix UK factories in Burton Latimer and Corby, Northamptonshire and the new owners are supportive of the commitments to Weetabix's existing employees.

Weetabix can trace its history back to 1932.

It said it still expects 2017 adjusted EBITDA of $920 million to $950 million, excluding any contribution from Weetabix.

In recent months, it has been hit by the weakness of sterling, and like many food producers has raised prices as a effect. I suspect that ABF were interested but wouldn't pay that price.

Although Bright Food purchased the brand with a view to expanding into the Chinese market, it is on home soil the brand has seen its strongest growth. "The Chinese market isn't ready for cold cereals with milk".

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