LONDON — London-based private equity firm Lion Capital L.P. is considering a sale of Weetabix to Shanghai, China-based Bright Food in a potential £1 billion ($1.6 billion) transaction, according to The Financial Times. Weetabix, which was acquired by Lion Capital (then known as Hicks, Muse) in November 2003, is the second-largest branded manufacturer by value of ready-to-eat cereals and cereal bars in the United Kingdom. Its Weetabix brand accounts for 7% of the U.K.’s total cereal sales.
The company’s portfolio of household brands includes Weetabix, Weetaflakes, Oatibix, Oatiflakes, Alpen, Seriously Oaty, Ready Brek and Weetos. In addition to its strong presence in the United Kingdom, the company has operations in North America, South Africa, Germany and Spain and exports to more than 80 countries around the world. Weetabix employs approximately 1,800 people worldwide and in 2010 generated sales of approximately £449 million.
According to The Financial Times, Lion Capital has been in talks with Bright Food for several weeks about a possible transaction, and the negotiations started shortly after Lion Capital late last year refinanced the £900m debt load of the food company.
But it still remains unclear how advanced the negotiations are or how likely a deal will be, The Financial Times noted, as Lion Capital has in the past been reluctant to sell Weetabix unless a potential buyer would be willing to pay a high price.