* Largest overseas deal by a Chinese food group
* Weetabix will bring healthy mix to Bright Food
* Deal value Weetabix group at 1.2 billion pounds
By Samuel Shen and David Jones
SHANGHAI/LONDON, May 3 China's Bright Food will
take control of breakfast cereal maker Weetabix, beloved by
generations of British children, in the biggest foreign
acquisition by a Chinese food group.
State-owned Bright Food has agreed to buy a 60 percent stake
in a deal which puts a value of 1.2 billion pounds ($1.94
billion), including debt, on the private-equity owned company
that coined the slogan "Have you had your Weetabix?"
The Shanghai-based group has been on the acquisition trail,
seeking to raise its profile and cater for its rapidly growing
home market. Weetabix is its second foreign purchase in a year
and its first in Europe after other deals fell through.
Eighty-year-old Weetabix is Britain's second biggest maker
of breakfast cereals and cereal bars after Kellogg.
Its brands include Alpen muesli and Ready Break as well as
Weetabix, which lays claim to being Britain's No. 1 breakfast
cereal for under-5s and is made from wheat grown within 50 miles
(80 km) of its base in southern England.
"As China's leading food group, we are pleased to become the
controlling shareholder of Weetabix," Bright Food chairman Wang
Zhongnan said in a statement on Thursday. "Weetabix has an
excellent product portfolio, including leading British cereal
brand Weetabix and other category-leading brands."
Private equity owners Lion Capital and Weetabix management
will keep a 40 percent stake.
The quintessentially British breakfast cereal group was
founded in 1932 by the secretive George family and soon
producing its iconic bricks of wheat. It was bought by a private
equity firm in 2004.
Bright Food now sees a big opportunity for Weetabix in
China, where breakfast is a very important meal and there is a
trend towards healthy eating.
The group, which makes "White Rabbit" candy, bought majority
stakes in Australia's Manassen Foods and New Zealand's Synlait
Milk over the past two years.
Analysts expected more deals would now follow in Europe
after its earlier failed attempts to buy Britain's
private-equity owned United Biscuits, the McVitie's and Hula
Hoops group, and a stake in French yoghurt firm Yoplait.
"This is a trend," said Ghislain de Mareuil, a Paris-based
lawyer at De Pardieu Brocas Maffei. "In China, you have to set
an example, and then others follow. What Bright Food has done
will definitely set a trend for other Chinese food companies the
way we have seen in the automotive industry."
Weetabix had sales of over 460 million pounds in 2011 and
employs around 1,800 people.
It has around 7 percent of the British breakfast cereal
market. As well as Kellogg, it competes with the Swiss based
joint venture Cereal Partners between Nestle and
General Mills whose brands include Shreddies and
Weetabix was sold by the George family for 642 million
pounds in 2004 to U.S. private equity firm Hicks Muse Tate &
Furst, which later restructured and spun out its European buyout
arm to form Lion Capital.
The deal is expected to close in the second half of 2012 and
is subject to Chinese regulatory approval.
Banking group Rothschild and lawyers Linklaters advised
Bright Foods on the transaction.
Bright Food has four subsidiaries listed on the Shanghai
Stock Exchange: Shanghai Jinfeng Wine Co, Shanghai
Haibo Co, Shanghai Maling Aquarius Co
and Bright Dairy & Food Co.