Blog: Kellogg, Intersnack named as possible United Biscuits nibblers
Michelle Russell | 28 May 2012
US food giant Kellogg and Germany's Intersnack are reportedly two firms eyeing the purchase of United Biscuits' salty snacks division.
While neither firm has confirmed whether they are interested, if Kellogg were successful, it would mark another move from the cereal giant into the salty snacks sector, where it is in the process of buying global brand Pringles.
The decision by buyout firms Blackstone and PAI Partners to spin off United Biscuits' snacks division also comes in the wake of a similar move from larger rival Kraft Foods, which is undergoing a split into a global snacks company and a North American grocery company.
Blackstone and PAI revealed in March they were planning to separate United Biscuits into two entities - salty snacks and bakery - suggesting the more focused businesses would "provide improved service" and "more targeted innovation and product development".
We then looked at which companies could be the runners and riders in the race for United Biscuits' salty snacks business - and Kellogg and Intersnack were named as potential participants.
Kellogg's US$2.7bn deal to buy Pringles from Procter & Gamble is set to "catapult" it into the number two position in the worldwide savoury snacks category, behind PepsiCo. A purchase of United Biscuits' salty snacks division would undoubtedly strengthen that position, certainly in the UK, and it would also fit with the group's aim to become "a truly global cereal and snacks company".
United Biscuits generated group revenues of GBP1.3bn and EBITDA of GBP230.8m in 2010. Net debt at the end of 2010 stood at GBP1.14bn. The salty snacks side of the business, which owns brands including Hula Hoops and Skips, has been valued at around GBP500m.
The auction process is expected to comprise two rounds of bidding, reported to be starting in September, the Financial Times suggested yesterday (27 May). Until then, speculation will undoubtedly continue as to which firms have their eye on the prize.
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