Weetabix factory fear after £1.4bn US sell-off

WEETABIX has been sold to the Americans for £1.4bn after the British brand struggled to break the Chinese market.

Shanghai-based owners Bright Food Group bought a majority stake in the firm in 2012, but hung the ‘for sale’ sign over the cereal-maker in January.

Now US consumer giant Post Holdings has snapped it up, also buying out an investment fund advised by Baring Private Equity Asia.

Unions have called for urgent talks to secure the future of jobs at Weetabix’s Northamptonshire base – where it sources grain from farms within a 50-mile radius.

Sally Mortimer, Unite regional officer, said: ‘We want to work constructively with the new management team to ensure the success of the iconic Weetabix brand and to safeguard the future employment for our hard-working and dedicated members.’

Weetabix, which has been manufacturing in Britain since 1932, exports to more than 90 countries but the UK remains its key market – and it holds a royal warrant.

It was family-owned until 2004 when it was bought by a Texas private equity firm, before later being sold to another private equity firm, Lion Capital. When Bright Food Group announced its intention to sell, potential suitors were thought to have included Primark-owner Associated British Foods, Cereal Partners Worldwide and Italian pasta maker Barilla.

Now Post, whose brands include Honey Bunches Of Oats and Pebbles, will be charged with driving sales in China – which Weetabix says is its most lucrative growth opportunity. Post has agreed in principle to establish a joint venture with Bright Food Group, and an investment firm advised by Baring Private Equity, to manage the China business. As part of the deal, Weetabix chief executive Giles Turrell, 50, is becoming chairman, and will oversee the integration.

He has sought to reassure staff, saying no job cuts were planned. He added: ‘As long as we remain successful in the marketplace, we will continue to manufacture at our plants in Northamptonshire.’

Analysts questioned Weetabix’s ability to win over Chinese consumers, but Turrell said ‘things take time to establish’.

However, Rob Wade, consumer insight director at Europanel, said: ‘What Weetabix came up against in China was a very different breakfast experience.

‘Chinese people tend to favour hot, rice-based dishes for breakfast, and the brand didn’t manage to persuade enough of them that cold cereal was a better option.’