Blog: Bright Food's United Biscuits "interest" ruffles feathers
Dean Best | 28 September 2010
Reports linking Chinese state-owned Bright Food Group to a possible GBP2bn (US$3.16bn) takeover bid for United Biscuits has provoked a typically robust response from parts of the UK press.
The rumours, which emerged over the weekend were reported upon worldwide yesterday (27 September), with the Daily Mail insisting a deal would be "a further hammer blow to the UK's manufacturing heritage".
At the other end of the UK political spectrum, the Unite union said the "uncertainty" over United Biscuits' future was "not welcome" and added: "Whenever businesses are bought and sold, particularly by private equity, invariably our members see their terms and conditions attacked and jobs offshored as new owners try to maximise profits from the company."
Across the English Channel in France, where United Biscuits has a significant presence, Le Figaro talked of a "food jewel" (namely the company's BN brand) being "swallowed by a Chinese giant".
But what of Bright Food? Little is known about the Shanghai-based company, although it has four listed subsidiaries. (For a breakdown of Bright Food's business, click here).
While the M&A spotlight shone on the parent company, one of those subsidiaries, Bright Dairy, has successfully concluded a piece of overseas investment in New Zealand. The dairy unit has secured regulatory approval for its acquisition of a 51% stake in New Zealand dairy firm Synlait.
The moves comes amid much debate in New Zealand about overseas investment, particularly in the agricultural sector.
The bid by Hong Kong's Natural Dairy Holdings to buy a series of farms in New Zealand has attracted local opposition and the country's regulator is still to rule on the move.
However, the New Zealand government yesterday announced plans to introduce a test of "economic interest" when deciding on whether to allow overseas investment in farmland. Bright Dairy's acquisition has been cleared but whether Natural Dairy's move will receive the green light remains to be seen.
What is clear, however, is that the food sector is an industry where domestic concerns over heritage, jobs and, increasingly, security of supply, come to the fore when overseas 'predators' come calling.
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