China’s Bright Food hires Goldman to sell UK firm Weetabix
The State-owned company has struggled to break into the Chinese market with cereal products.
China’s Bright Food Group has hired Goldman Sachs to sell the breakfast cereals producer Weetabix in a deal that could value the famous British brand at roughly 1 billion pounds, according to three sources familiar with the matter.
The sale process is expected to start in January, less than five years after the Chinese company agreed to take control of the 84-year-old business, said the sources.
The sale comes after Bright Food has struggled to crack the Chinese market, where many consumers tend to eat hot breakfasts. The overwhelming majority of Weetabix sales still come from its slower-growth domestic market, where it remains a leading brand.
State-owned Bright Food agreed to buy a 60 percent stake in Weetabix in 2012 from private equity firm Lion Capital, in a deal that valued it at 1.2 billion pounds. Baring Private Equity Asia subsequently bought Lion’s remaining stake in 2015.
The business has not grown significantly since then, the sources said, estimating a similar price again based on current earnings before interest, tax, depreciation and amortisation (EBITDA) of 130 million pounds.
A Weetabix spokesman said the company does not comment on rumour or speculation. Goldman also declined to comment, while Bright Food and Baring were not immediately available outside of regular business hours in Asia.