ABF Weighs Bid for Bright Food’s Weetabix Cerealby and
Associated British Foods Plc is considering a bid for Weetabix, the cereal brand controlled by China’s Bright Food Group Co., people familiar with the matter said.
ABF could seek to combine the brand with its U.K. cereals business, the people said, asking not to be identified because the deliberations are private. Baring Private Equity Asia Ltd. bought a 40 percent stake in Weetabix in 2015 in a deal that valued the brand at about 1.3 billion pounds ($1.6 billion), people familiar with the deal said at the time. Bright Food owns the remaining 60 percent.
Italy’s Barilla Holding SpA may also consider a bid, one of the people said. U.S. breakfast cereal giant Kellogg Co. could make an offer as well, though they may face competition issues, another person said. No final decisions have been made, and the companies could decide against pursuing a deal.
Representatives for ABF, Baring and Kellogg declined to comment. A representative for Bright Food couldn’t immediately be reached during the Chinese New Year holiday. A representative for Barilla didn’t immediately respond to calls and e-mails seeking comment.
Weetabix gets the majority of its sales from the U.K., which accounted for 290 million pounds out of the firm’s 346 million pounds of revenue in the year ended Jan. 2, 2016, according to its financial statements. Total sales had fallen 1.6 percent from a year earlier. Profit fell 15 percent to 84.6 million pounds.
Reuters reported in December that Bright Food had hired Goldman Sachs Group Inc. to explore a sale of the business at a value of about 1 billion pounds, citing unidentified people familiar with the matter.
ABF controls a number of food and retail brands globally including Dorset cereals. The company also owns Twinings tea and Ovaltine, as well as the Primark clothes chain. Barilla, known for its pasta, also owns the Gran Cereale and Pavesi snack brands, among others.