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Overseas-owned companies make up greater share of UK food sector, research finds

A host of famous British brands including Weetabix and Flora have been snapped up by foreign buyers in the last two years

Ben Chapman
Monday 21 May 2018 17:20 BST
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M&A deals involving UK food companies increased fivefold to £5.8bn in 2017/18, up from just £645m the previous year
M&A deals involving UK food companies increased fivefold to £5.8bn in 2017/18, up from just £645m the previous year

Overseas-owned companies account for almost half of the revenues of leading food firms in the UK after a rash of buyouts of famous British brands, research has found.

The 30 largest food companies in the UK made £31.5bn last year, of which £14.9bn went to overseas-owned companies, commercial law firm EMW found.

The share of sales going to overseas-owned firms rose from 44 per cent in 2017 to 47 per cent this year.

UK companies in the sector are seen as undervalued, leading to a series of takeovers, EMW said, adding that the UK food industry is often held in high regard for its top-quality processes and advanced approach to development and branding, the report said.

A weak pound has also made UK food companies an attractive target for overseas buyers.

M&A deals involving UK food companies increased fivefold to £5.8bn in 2017/18, up from just £645m the previous year.

American buyers have been particularly active in the market. US-headquartered McCormick & Co bought Reckitt Benckiser’s food business for £3.2bn in August 2017, while US-based Post Holdings bought Weetabix from China’s Bright Food Group for $1.4bn in July 2017.

US buyout fund KKR bought Unilever’s spreads business, which includes Flora, for $8bn in December 2017.

Arguably the most controversial deal in the last few years was the purchase of Cadbury by US food giant Kraft for £11.7bn in 2010.

Six of the UK’s Top 30 “Big Food” companies have US owners such as Kellogg, Mars and Mondelez. Three foreign-owned companies have owners from the Republic of Ireland, namely Greencore, Glanbia and Kerry Foods.

Sebastian Calnan, Head of EMW’s food group said: “UK food companies are renowned for their internationally recognisable brands – it is no surprise that overseas companies have a strong interest in them.

"The UK food market in itself is also one of the most attractive markets, with consumers more willing than in other EU countries to pay for premium products.”

“We expect that, barring a shock failure in the Brexit negotiations, the shift towards overseas ownership will continue.”

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