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Big Brands > Kellogg

United Biscuits solicits Wahaha and Kellogg for £520m KP Snacks arm – reports

By Oliver Nieburg , 20-Aug-2012

Is an Asian deal on the cards for UB's KP Snacks arm?
Is an Asian deal on the cards for UB's KP Snacks arm?

United Biscuits has issued a “teaser” letter to six firms including Chinese food business Wahaha and Kellogg as it looks to offload its recently spun-off KP Snacks business for £520m, according to reports.

The Sunday Telegraph reported yesterday that Wahaha was the favourite to land KP Snacks, which includes brands such as McCoy’s and Hula Hoops.

United Biscuits (UB) previously suggested to BakeryandSnacks.com that the company would be sold as it announced a separate snacks division, KP Snacks, from its larger biscuits business earlier his month.

UB’s private equity owners Blackstone Group LP and PAI Partners failed in a bid to sell its joint biscuit and salty snacks business for £2bn to Chinese firm Bright Foods in 2010.

Director of insight for Mintel Food and Drink, Marcia Mogelonsky, previously told this site that a bid from Asia was likely.

She touted Korean firms Orion and Lotte as possible suitors and didn’t rule out renewed interest from China’s Bright Foods. However, Wahaha was not among the candidates.

The Hangzhou Wahaha Group is better known for beverages than snacks.

UB a platform for Kellogg’s snacks?

Mogelonsky said that Kraft Foods was effectively out of the running, but added that Kellogg was a possibility.

Kellogg became the global number two snacks player behind PepsiCo/Frito-Lay when it acquired  Pringles from Procter & Gamble for $2.7bn in February this year.

“Its purchase of Pringles could be a first step in establishing a strong snack food arm and UB's newly established KP company would give it a complementary suite of products, both product-wise and geographically,” said Mogelonsky in previously unpublished comments.

When the KP Snacks split was made public, UB announced Nick Bunker, who had been running Kraft/Cadbury in the UK and Ireland for the past four years, as the CEO of the spun-off company.

Mongelonsky said that Bunker was suited to the role after overseeing the merger of Kraft and Cadbury in 2010.

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