Giles Turrell, Weetabix's CEO told BakeryandSnacks that, at the completion of the transaction, Sally Abbott, Weetabix’s director of marketing, will become MD of Weetabix UK and Ireland and report to Rob Vitale. Turrell will assume the newly created role of chairman of Weetabix with responsibility for overseeing the integration of Weetabix into the Post portfolio.
“This will ensure that Weetabix continues delivering the high quality and consistent products that have made the business so successful to date,” he said.
According to Turrell, Post Holdings will also retain production of Weetabix and other products at the Weetabix UK factories in Burton Latimer and Corby, Northamptonshire and the new owners are supportive of the commitments to Weetabix’s existing employees.
“It’s business as usual,” he told this site.
Unite (which represents 110 employees) has issued a statement that regional officer Sally Mortimer will be seeking an urgent meeting with the new owners to seek assurances on job security.
Succession of ownerships
The UK’s second biggest cereal brand faces its fourth takeover since it was formed in 1932.
The Northamptonshire-based firm was family-owned until 2004, when it was bought by private equity firm Lion Capital, which sold a 60% stake of the company to China’s Bright Foods in 2012. Baring Private Equity Asia held the remaining 40%.
After purportedly struggling to build a market share in China, the Shanghai-based company put the British company up for sale in January.
However, according to Turrell, the company’s market share for cereals and drinks rose from 15.3% to 16.4% in the UK last year.
Weetabix did report that sales had fallen by 2% to £346.4m, while profits dropped by 13% to £94.3m in 2016.
The announcement of Bright Foods’ intention to sell commenced a bidding war between Post Holdings; Associated British Foods, which owns Jordans cereals; Italian pasta maker Barilla; and Cereal Partners Worldwide, a JV between Nestle and Cheerios producer General Mills.
Bright Foods is believed to initially want £1.5bn ($1.88bn) for Weetabix, but after months of negotiations, accepted the St. Louis-based maker of Gold Crisp and Cocoa Pebbles’ bid of £1.4bn ($1.76bn).
Post Holdings is the third largest cereal company in the US.
“The transaction is expected to be completed by the third quarter of calendar 2017 (Post’s fiscal 2017 fourth quarter), subject to the satisfaction of limited closing conditions, including the expiration of waiting periods under US antitrust laws,” Turrell told us.
Pan Jianjun, spokesman for Bright Food, said the sale did not mean the Chinese firm was abandoning its global ambitions and the company will continue with its overseas expansion.
Turrell said Weetabix welcomed the acquisition by Post Holdings and said it opened doors for continued expansion.
Post CEO Rob Vitale said the purchase “continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally”.
Post has agreed in principle to establish a JV with Bright Foods and Barings Private Equity Asia to manage the Chinese operations.
Alongside the oval-shaped cereal bricks, Weetabix also produces Weetabix Minis, Alpen and Weetos.
The company launched Weetabix On The Go, a range of breakfast drinks in 2014 to capitalize on the increasing trend of smoothies and protein drinks. According to the company, the range clocked up sales of more than £15m ($18.96bn) in 2016.
Weetabix exports its brands to more than 90 countries around the world and is the majority owner of a JV in Kenya that serves the African market.