Campbell's souper bid for UB takes the biscuit

Campbell's has offered £1.5bn for United Biscuits. That's a lot of Jaffa Cakes.

The rampage of US corporates through much-loved UK brands continues apace: this time, the Yanks have United Biscuits, the maker of such British tea-time staples as Penguin biscuits, Jaffa Cakes and even – gasp! – Digestives in their sights. What next?

The prospective buyer is the Campbell Soup Company, whose distinctive red-and-white tins were made famous for quite a lot longer than 15 minutes when Andy Warhol painted them back in the day. Its plan is apparently to break up the firm, preparing to offer £1.5bn to split the biscuit division away from the rest of United to create an independent company.

A US company taking over one of the UK’s best-loved snack manufacturers? It feels like we’ve heard this before. That said, the deal is unlikely to generate the same backlash that happened after US ‘cheese products’ group Kraft launched its hostile takeover of Cadbury. United, whose non-biscuit division makes brands such as KP Nuts, Hula Hoops and Twiglets, is already owned by two foreign companies: US private equity group Blackstone and French buyout specialist PAI Partners.

UB’s owners have been keen to offload the company for a while, but have so far failed to drum up much interest for the group as a whole. Hence their reported interest in this break-up offer from Campbell’s. But, since the biscuit biz accounts for about three-quarters of the total operation, if the split goes ahead what’s left behind won’t amount to much more than a pile of crumbs.

It’s been a tumultuous few years for United, which last changed hands in 2006 for £1.6bn – including £1.2bn worth of debt. It’s since staged a pretty impressive recovery, with revenues of £1.3bn last year and profits of £223m – 14% up on the year before. Now valued at about £2bn, Blackstone and PAI had originally considered floating the group, but gave up that idea because of market instability.
Campbell isn’t the only one in the running: Kellogg, Pepsico and Kraft (yes, them again) are also reported to be planning to launch bids for the company. So, whatever happens, UB looks likely to be broken up and under new ownership before too long. That’s the way the cookie crumbles…

In today's bulletin

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Campbell's souper bid for UB takes the biscuit
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