Chinese Food Group Digests Rest Of Weetabix

One of China's biggest food companies is to take full control of Weetabix, the UK's second-biggest breakfast cereal producer, after its minority shareholder triggered an option to sell its remaining shares.

Sky News understands that Bright Food, which bought a 60% shareholding in Weetabix in 2012, is poised to acquire most of the 40% of the company it does not already own.

Lion Capital, the private equity group which has held a stake in Weetabix for a decade, exercised a put option to sell its stake to Bright Food in recent weeks, according to insiders.

Once completed, the transaction will hand full ownership of brands such as Alpen, Ready Brek and Weetos to Bright Food, reflecting a growing trend of takeovers of prominent Western brands by Chinese companies.

Lion Capital's purchase of Weetabix in 2004 ended seven decades of family ownership, with the price for its remaining stake understood to have been calculated on the same earnings multiple as the original deal with Bright Food.

Weetabix is one of the most popular food brands in the UK, having been founded in 1932 and subsequently expanding to more than 80 countries around the world.

Run by Giles Turrell, its chief executive, the 2012 takeover by Bright Food valued Weetabix at £1.2bn.

Employing around 1,800 people, the Northamptonshire-based company made a pre-tax profit of £68m in the last year for which results are available.

Its backing from Bright Food has spurred plans for the launch of product variants such as green tea-flavoured Weetabix targeted at Chinese consumers for whom breakfast cereals are not part of a conventional daily diet.

Although the company is performing well, it told employees earlier this year that it planned to scrap a planned 2.5% pay rise amid a cost reduction drive triggered by pressure from supermarket own-brands and discount rivals.

Bright Food and Lion (Other OTC: LIOPF - news) have continued to work together on other prospective partnerships, exploring a £2bn bid for United Biscuits last year before deciding not to proceed.

Lion Capital and Weetabix declined to comment.