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Firms looking to tap Africa may look to United Biscuits amid fresh sale rumours – analyst

By Oliver Nieburg , 16-Mar-2012

Players looking to capitalise on the growing African market may move for parts of United Biscuits (UB) following speculation of a split ahead of a £500m sale.

UB owners Blackstone Group LP and PAI Partners are reported to have lined-up Credit Suisse to separate its salty snacks business ahead of a £500m sale, according to industry sources cited by the Financial Times.

BakeryAndSnacks.com asked UB to confirm or deny the reports, but it said it did not comment on speculation.

UB has been tight-lipped on spates of sale speculation since a failed bid to sell its joint biscuit and salty snacks business for £2bn to Chinese firm Bright Foods in 2010.

Africa potential

Global food analyst at Mintel Marcia Mogelonsky told this site that UB may present opportunities for companies looking to expand in Africa.

“The population of Africa will outgrow that of Asia by 2050, and there is thought that now is the time to start growing there.”

“Olam (Singapore) just bought Titanium Holding in Nigeria and there is a stirring of interest in looking into Africa now,” she said.

UB has presence in in South Africa, Nigeria and the Middle East.

The company cites Nigeria and the Middle East as being among its core markets.

Likeliest candidates

Mogelonsky said that a £500m sale of UB’s salty snacks operation, which includes Hula Hoops and Skips, would mark the third big snacks deal of the year following Kellogg’s Pringles buy and General Mills’ acquisition of Food Should Taste Good.

Mogelonsky told this site after earlier split rumours in December last year that Kraft, PepsiCo or a large Asian company may move for UB

“I still think that the biscuits business is likely to go to an Asian company, the smaller salty snack and nuts business may well stay in the UK or Europe,” she said following the latest news.

The unnamed source in the Financial Times said that the larger biscuits part of the company, which includes McVities, would not be up for sale until 2013.

Other contenders

Outside the “usual suspects”, Mogelonsky said that South African Tiger Brands may be interested in the salty snack part of UB and private equity firm Silk Invest, which recently acquired a confectionery firm in Egypt could be a contender.

“Nestle is also expanding its presence in Africa hinting that looking to that continent is a growing trend as is more presence in the Middle East.”

“UB is completely secretive on what they are truly planning. I get the sense that, again, the Bright situation embarrassed them into a policy of silence,” she concluded.

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