According to latest publications, UK cereal maker Weetabix is set to be sold to US company Post Holdings for $1.8 billion.
The Shanghai-based Bright Food, that acquired a major stake in the UK breakfast brand in 2012 for £1.2 billion, reportedly decided to sell after long held negotiations with multiple interested parties.
A reported agreement between the British cereal that carries a royal warrant and the US group, which owns cereals brands like Golden Crisp and Cocoa Pebbles, is due to be revealed as early as Tuesday morning New York time before US markets open.
This proposed takeover of the 84-year-old company marks the latest in a wave of overseas takeovers of British companies after the UK voted to leave the EU in June last year.
According to Thomson Reuters, UK target M&A post-Brexit is at its second-highest level in eight years, as a plunge in valuations and a weaker pound have made the UK an attractive destination for overseas buyers.
Reports said Other interested parties keen to buy Weetabix included the UK’s Associated British Foods and Cereal Partners, a joint venture between Nestlé and General Mills. Italy’s pasta maker Barilla also was reportedly keen for the company.
In the recent times, Bright Food has failed to make Weetabix palatable to Chinese consumers, who tend to favor hot and savoury breakfast dishes.
Meanwhile Weetabix’s revenues of £346 million in 2015 were 2% lower than in 2012, while its pre-tax profits were down 1% to £94.3m over the same period.
Furthermore Barclays, Nomura and Credit Suisse are financial advisers to Post Holdings and are expected to offer some financing for the transaction.