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.

Last Updated: 06 Nov 2012

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

Ad market bouncing back, says WPP's Sorrell
HP squares up to Dell over £1bn data biz acquisition
Persimmon beats Bovis to divvy, but mortgage woes continue
Campbell's souper bid for UB takes the biscuit
A Traveller's Tale: The view from Chicago suddenly turns bleak

Find this article useful?

Get more great articles like this in your inbox every lunchtime

How not to handle redundancies

It can come back to bite you if you get it wrong.

Sarah Willingham: I will never start another business again

The entrepreneur and investor on top leadership skills, pivotal career moments and Dragons' Den.

A new etiquette for video meetings

Virtual calls are not the same as in-person conversations, so we need to change the...

There's opportunity in this recession

A Schumpeterian view of closing businesses.

Is it okay to spy on my staff if I think they're slacking ...

Everything you wanted to know about employee surveillance but were afraid to ask.

The psychology of remote working

In depth: The lockdown has proven that we can make working from home work, but...