Chinese food giant Bright Foods, which owns shops as well as factories and is backed in part by the Shanghai authorities, is in exclusive talks to buy the UK’s United Biscuits for a hefty £2.5bn.
It’s open season on British companies at the moment because the slide in value of the pound has made them much cheaper for overseas companies to buy, most notably Kraft with its acquisition of Cadbury for £11bn. This prompted a political storm although UB, which makes McVitie’s, Jaffa Cakes, Hula Hoops and Penguin biscuits, is already owned by two interlopers, Blackstone from the US and PAI in France.
Bright Foods says it wants to market UB’s brands to the vast numbers of Chinese middle class who just can’t wait to switch from their healthy diet to sugary snacks. Bright Foods brands include Big White Rabbit confectionery and Shikumen yellow (rice) wine.
The likely Bright Foods deal will be a shock to US and European manufacturers who were eyeing UB but at a price rather lower than £2.5bn. Campbell’s from the US was the early favourite, Nestle certainly has the money but doesn’t seem interested so far.
Foreign ownership need not be bad for the UK economy and its workers. Jaguar Land Rover has prospered mightily under Indian owner Tata despite a very shaky start. But the fear is always that jobs, and there are 7,000 UB jobs in the UK, will eventually migrate to the owner’s homeland.