CONTINUING ON A food theme, China’s breakfast of champions is generally fried dough and rice porridge, but we could soon see a lot more Chinese eating Weetabix, Alpen and Ready Brek first thing in the morning.
And they may well be clad in that most traditional of British brands, Aquascutum, when they do pour the milk on their cereal.
Bright Food, China’s second biggest food company, last week succeeded in buying a 60 per cent stake in the British breakfast cereal maker Weetabix from the private equity firm Lion Capital in a deal that values Weetabix at around about €1.5 billion, including debt.
Bright Food, which is backed by the Shanghai government, has previously bought a 75 per cent stake in Manassen Foods, an Australian importer, and a stake in New Zealand dairy producer Synlait Milk.
However, it lost out to General Mills in buying a stake in French yogurt maker Yoplait last year and it was outbid by Wilmar International for CSR’s sugar unit, Australia’s largest producer in 2010.
Bright Food chairman Wang Zongnan has signalled that he expected the company to make one to two overseas deals this year in the sugar, dairy, wine and “casual food” industries.
Weetabix breakfast cereal accounts for 7 per cent of British cereal sales and overall annual sales of €126 million. Bright Food is considerably larger – last year the company had revenues of €9.44 billion.
The deal is the largest yet by a Chinese company in the food and drink business, and is certainly one of the biggest swoops for a brand that we’ve seen. Despite large cash hoards, Chinese firms have been relatively cautious in moving into established overseas brands – the exceptions include Lenovo which has done well with the IBM ThinkPad brand and car maker Geely which bought Volvo. Nanjing Auto also moved for MG’s car-making plant.
And there are signs of a growing interest in overseas brands. Last week saw a second acquisition when Hong Kong-listed YGM Trading bought the British luxury clothing brand Aquascutum – which has a 160-year history but which entered administration last month after racking up a €30 million loss last year.
