The trio were flagged up as favourites to take over UK biscuit giant, maker of brands such as Jacob’s Cream Crackers, Jaffa Cakes and McVitie’s, in September.
Other firms rumoured to be in the running had included Philippino conglomerate San Miguel, which has a large food subsidiary, the Saudi Arabian Savola Group, and Italy’s Ferrero. However, these now seem to have fallen by the wayside.
Private equity groups showed little interest in the bidding process. This is believed to be because UB’s current private equity owners Blackstone and PAI Partners had realised most of the straightforward potential in the business.
The owners were also considering a stock market flotation of UB as an alternative to a sale, but the fact that bidding has progressed to this stage now makes that unlikely.
Kellogg is believed to be in the strongest position.
Robert Lawson, co-founder of Food Strategy Associates, former UB strategy director and former global director strategy, snacking at Kraft International, told FoodManufacture.co.uk in September: “Kellogg has the financial muscle and synergies to outbid anyone else in the process, but that doesn’t mean it will – it may have other priorities.”
Concerns over investment
The Telegraph has claimed that Kellogg has concerns over the investment needed to improve some of UB’s factories, many of which are known to be in need of modernisation.
Meanwhile, reports suggest Burton’s Biscuits would face potential competition concerns if it tried to acquire UB. As a result, it is understood to be considering the sale of its Cadbury Fingers licence to confectionery and snacks firm Mondelēz International to avoid provoking regulatory authorities through a UB deal.
Lawson also did not rule out bidders uniting over joint bids or parties bidding only for parts of UB, rather than the whole of the business.