Weetabix has confirmed that it will push ahead with a GBP30m (US$37.6m) investment to increase production as Nestle, General Mills, Post Holdings, Associated British Foods and Barilla reportedly line up to submit bids for the business.
Speaking on the BBC’s Today Programme this morning (30 January), Weetabix CEO Giles Turrell declined to comment on “speculation” over whether the company had been put up for sale by its Chinese owners. However, he confirmed the group plans to invest.
The company is spending GBP30m to increase capacity at its production sites in Burton Latimer and Corby. Asked whether this investment could be scuppered under a new owner, Turrell responded: “No, we are committed to that.” The company did not immediately respond to requests for further comment.
According to a Reuters report, citing unnamed sources, bidders are preparing offers for the business. One bid is reportedly set to come in from Nestle and General Mills through their global breakfast cereal venture Cereal Partners Worldwide. Post, the third-largest breakfast cereal business in the US, Dorset Cereals owner ABF and Barilla are also preparing offers, Reuters said.
A spokesperson for ABF declined to comment on M&A speculation while the other companies named did not immediately respond to requests for confirmation.
Earlier this month, reports suggested Quaker maker PepsiCo was also mulling a bid. Yildiz Holding-owned Pladis, which had also been linked to a potential move, ruled itself out of the race last week.
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Chinese state-owned-enterprise Bright Food acquired 60% of Weetabix from private-equity firm Lion Capital in 2012, with an eye on building the UK group’s presence in Asia, particularly China. In 2015, Baring Private Equity Asia bought the remaining 40% Lion Capital held in Weetabix.
Two years ago, reports emerged Bright Food was considering floating Weetabix and another of the Chinese group’s food business, Australian group Manassen Foods. Bright Food snapped up 75% of Manassen in 2011. Citing three unnamed sources, Reuters reported Bright Food had hired Goldman Sachs to offload its stake in Weetabix at the end of 2016.