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General Mills UK buys Saxby Bros

By Elaine Watson , 05-Feb-2007

General Mills UK buys Saxby Bros

Jus Rol has snapped up Saxby Bros, its biggest rival in the branded ingredient pastry sector, for an undisclosed sum.

The deal gives Jus Rol’s owner General Mills UK control of 80% of the market to supply ingredient pastry to UK retailers and 15-20% of the market to supply ingredient pastry to the UK bakery and manufacturing sectors. It has been cleared by regulators despite concerns raised by some third parties that the companies’ combined brand strength could raise competition issues.

The deal would not be referred to the Competition Commission, said the Office of Fair Trading: “The majority of retail customers we spoke to consider that they still have sufficient alternative supply options open to them, including the possibility of sponsoring entry or purchasing from overseas manufacturers.”

While some retailers felt confident in their alternative supply options post-merger, others expressed concerns over the loss of their ability to “play the parties off against one another when negotiating contracts”, it added.

However, low barriers to entry and expansion, combined with the presence of strong buyer power were considered to “exert a significant constraint on the parties post-merger sufficient to offset any loss of competition”

Bosses at Jus Rol declined to comment on long term plans for family-owned Saxby’s. However, it is understood that there are no immediate plans to close down Saxby’s Wellingborough factory and transfer production to Jus Rol’s site in Berwick-upon-Tweed.

A General Mills UK spokesman said: “By combining the knowledge and expertise of the two companies and focusing on the needs of the consumer, we will be able to develop and grow the total market. General Mills can supply the capability and, more importantly, the resource to develop the Saxby’s business.”

Saxby’s, which turned over £11.7M in the UK in the year to April 2006, supplies branded and own-label chilled pastry to the multiples and independent retailers, manufacturers and caterers.

The company axed more than two thirds of its workforce in spring 2005 after pulling out of savoury pies in a bid to focus on more profitable parts of the business. However, it has invested more than £10M at its Wellingborough site over the past 10 years.

Jus Rol, which was acquired by General Mills in 2001, has also undergone significant investment in recent years at its Berwick factory, installing new production lines, spiral freezers and automated packing equipment.

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