Weetabix stays in foreign hands after being acquired by US giant for £1.4bn

● Buyer Post Holdings says deal involves JV with sellers to distribute across China

Breakfast cereal company Weetabix has been bought out of Chinese ownership after a £1.4 billion swoop by US consumer giant Post Holdings.

The household staple, which has its UK headquarters in Kettering, has been sold by the Bright Food Group and an investment fund advised by Baring Private Equity Asia after they struggled to push the brand into China.

Weetabix, which also owns Alpen, Weetos and Ready Brek, has 1,800 staff and secured revenues of $513 million (£409m) and earnings of $148m for 2016.

It has three manufacturing operations in the UK and produces all the wheat for its cereals within 50 miles of Burton Latimer, Northamptonshire.

Rob Vitale, president and chief executive of Post, the third-biggest cereal-maker in America, said it sees Weetabix as “a fantastic strategic fit”.

He also said it “continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally”.

US and Asian businesses have ramped up their interest in buying British firms following the pound’s 17 per cent plunge against the US dollar since the Brexit vote.

Bright Food Group, a stateownedfirmbasedinshanghai, bought a 60 per cent stake in Weetabix in 2012, with the rest being held by Baring Private Equity Asia.

As part of the new deal, Post will launch a joint venture with the two Asian sellers to distribute Weetabix products throughout China.

The move will also trigger a top-level shake-up in the UK, with Sally Abbott being promoted to Weetabix managing director from director of marketing, while Weetabix chief executive Giles Turrell will become chairman.

Post, which recorded annual revenues of $5 billion to 30 September, said the tie-up would bolster earnings by £120m a year as well as deliver annual cost savings of around £20m in three years.

George Salmon, equity analyst at Hargreaves Lansdown, said the deal follows Kraft Heinz’s bid for Unilever and 21st Century Fox’s approach for Sky, “and further transatlantic deals may be flushed out by the strong dollar and rising US interest rates. It’s also unsurprising to see one of the UK’S biggest cereal brands remain in foreign ownership, due to the pound’s weakness.

“Uk-listed Associated British Foods was rumoured to have been interested in a deal, but any domestic buyers would have had to overcome the headwind of the pound’s reduced buying power.”