According to research from commercial law firm EMW, 47% of UK food businesses are owned by overseas interests, up from 44% in the previous year.
Based on overall turnover, this equates to £14.9bn of the £31.5bn generated by the UK’s top 30 food companies.
Six of these 30 companies are owned by US businesses, including Kellogg’s, Mars and Mondelēz, while three have owners from the Republic of Ireland – Greencore, Glanbia and Kerry Foods.
Mergers and acquisitions
EMW attributes the increase in overseas ownership to the spate of mergers and acquisitions that took place in recent years, currency fluctuations and that these foreign companies can often see UK food businesses as undervalued compared to their perceived stock market potential.
It added that the UK food industry was often held in high regard for its advanced approach to food development, branding and high-quality processes.
Examples cited by EMW included Reckitt Benckiser’s food business bought by US-headquartered McCormick & Co for £3.2bn in August 2017, Weetabix being sold to US-based Post Holdings, for $1.4bn in July 2017, and Unilever’s spreads business being sold to US buyout fund KKR in December 2017.
Sebastian Calnan, head of EMW’s Food Group, said: “Overseas-owned companies are now responsible for a very major and growing percentage portion of the UK food sector’s turnover.
“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.”
Calnan added that this was expected to continue, as long as the Brexit trade talks bore fruit.
“We expect that, barring a shock failure in the Brexit negotiations, the shift towards overseas ownership will continue.”