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Bloomberg
US cereal company Post Holdings Inc. agreed to buy Weetabix Ltd. from Bright Food Group Co. of China for 1.4 billion pounds ($1.8 billion), adding the British breakfast staple to a portfolio that includes Grape Nuts and Honey Bunches of Oats.
The deal for the maker of oval-shaped cereal bricks gives Post a stronger presence in the UK, which accounted for four-fifths of Weetabix’s 346 million pounds of revenue in the year ended January 2, 2016, according to financial statements.
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 Chief Executive Officer Rob Vitale said in a statement on Tuesday.
The acquisition is the latest in a series of deals reshaping the packaged-food industry, with UK companies attracting outsize interest after the pound’s plunge in the wake of the vote to leave the European Union reduced prices for overseas buyers. Unilever has put its ailing spreads business up for sale after rebuffing an approach from Kraft Heinz Co., while Reckitt Benckiser Group Plc is considering a sale of its French’s Foods unit after agreeing to buy infant-formula maker Mead Johnson Nutrition Co.
Post said Weetabix, which also owns Alpen muesli and other brands, will contribute about 120 million pounds of adjusted earnings before interest, taxes, depreciation and amortization annually before expected cost savings of roughly 20 million pounds by the third full fiscal year after closing. The British company’s total sales dropped 1.6 percent last year, and profit fell 15 percent to 84.6 million pounds.