Experts laud Bright Food's purchase of Weetabix

beAnalysts have praised Chinese food and beverage manufacturer Bright Food's acquisition of the Weetabix Food Company, a British breakfast cereal producer. Bright Food (Group) Co., Ltd. announced Monday that it had completed the acquisition of Weetabix by purchasing 60 percent of its shares, the fourth overseas acquisition made by the company in the past two years. With a transaction value of 680 million pounds (about 1.09 billion U.S. dollars) for 60 percent of Weetabix's shares and a portion of its debt, the deal marks the largest overseas acquisition by a Chinese food company. Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultant Co., Ltd., said Wednesday that the acquisition shows Bright Food's confidence in the market prospects for breakfast cereal in China. Bright Food will fully support the global growth of Weetabix by putting its focus on the Asian market, particularly China, a press release on the company's website said. Chairman of Bright Food Wang Zongnan said he believes Weetabix's sales growth in China will exceed the average annual growth of China's cereal market with the support of Bright Food. The landmark acquisition means Bright Food will be able to capitalize on Weetabix's brand influence when entering the UK and other overseas markets, Wang said. Ma said that the purchase not only concerns Bright Food's global allocation of resources, but also demonstrates its ability to exert its influence in global operations. Bright Food financed its acquisition by borrowing from both Chinese and foreign banks. It adopted a "club financing" approach by giving equal participation status to all banks, which significantly reduced lending rates. "The participation of financial institutions can enhance expectations for the acquisition's success, which can be much more important than just the capital they provide," said Zhang Huiming, head of the Enterprise Research Center at Fudan University. Financial institutions can provide external risk evaluations, Zhang said, adding that diversified judgments will help make the evaluations more scientific.