ABF Acquires Dorset Cereals in £50m Deal

05 Jun 2014 --- Associated British Foods (ABF), which owns brands such as Jordans and Ryvita, has bought Dorset Cereals in a £50m takeover deal. ABF, which also owns high street fashion retailer Primark, is believed to have fought off competition from rivals Kellogg’s and Weetabix.

Dorset Cereals, which is being sold by Wellness Foods portfolio, manufactures premium porridge, muesli, granola and cereal brands. It launched a new oat-based granola line in December last year.

ABF can now add the premium Dorset Cereals products to its portfolio, which already comprises the Jordans cereal brand. Jordans was acquired in 2008 when it was merged with Ryvita.

“We can confirm that The Jordans & Ryvita Company, part of Associated British Foods, has reached an agreement to purchase the Dorset Cereals brand from Wellness Foods, subject to regulatory approval,” the company said in a statement. ABF is expected to maintain Dorset Cereals’ existing manufacturing plant in Poundbury, Dorset.

Wellness recently disposed of its Rowse Honey brand, to Valeo Foods, which is backed by CapVest.
The news follows a pattern this year of a high volume of deals affecting the food and beverage market. In the first quarter of this year deals rose by a third compared with the fourth quarter of 2013, according to business advisory firm Grant Thornton.

“This rise in M&A deal volumes builds on the uptick we reported in Q4 2013 and points to a positive start to the year as a whole,” says Trefor Griffith, partner and head of food and beverage at Grant Thornton.

“Despite the tough market conditions faced by many food and drinks manufacturers – especially with the intensifying competition between the UK’s grocery retailers, deals have been buoyed by significant interest from overseas buyers keen to acquire UK assets. As a result, we are optimistic about the outlook for further deals across the sector.”