2 Sisters sells part of Fox’s Biscuits for £246m

By Gwen Ridler

- Last updated on GMT

Reports of an auction of Fox's Biscuits overseen by Rothschild first surfaced in November 2019
Reports of an auction of Fox's Biscuits overseen by Rothschild first surfaced in November 2019

Related tags Ambient Finance

2 Sisters Food Group has confirmed that it has sold part of Fox’s Biscuits to 'a Ferrero-related company' in a £246m deal.

2 Sisters stated it had sold its Batley and Kirkham factories, which primarily produce biscuits sold under the Fox’s brand. Meanwhile, 2 Sisters will retain the third site at Uttoxeter, which produces own-label biscuits for major retailers. 

Fox’s Biscuits is a major player in the biscuit sector, making household names such as Rocky Bars, Party Rings, Crunch Creams, Crinkle Creams, Chocolatey and Viennese. It also makes own-label biscuits and selection boxes for major retail outlets.

Ferrero Group claims to be the world’s third largest chocolate and confectionery business which has diversified into new sectors as it expands its global portfolio. Ferrero and its related company represents now the second player in worldwide sweet biscuits market. 

Commenting on the purchase, a spokesman for Ferrero said: “The Ferrero-related company acquired Fox’s as we believe there is significant scope to grow the business, building on its history in the British biscuits’ market and leading position in every segment of the biscuits’ category.

"Through this acquisition, and our two previous acquisitions of Biscuits Delacre and Kelsen Group, we expect to increase our relevance in the rich and fine biscuits category.”

The purchase of Fox’s will be the second European biscuit acquisition within 12 months by a Ferrero-related company.

'Fox's an attractive brand'

Ranjit Singh, president of 2 Sisters parent firm Boparan Holdings Ltd, said: “Fox’s Biscuits has always been an attractive brand and as one of only two major independent biscuit makers in the UK, it is a prized asset in this market. 

“We have listened to many interested parties over the years, but we have always been clear that Fox’s would only be sold to the right new home, at the right time and for the right value. This sale represents another significant deal for us, underlining our commitment to our business turnaround. 

“It strengthens our balance sheet even further and shows we are following through with our promises to focus on our key strengths. I wish all colleagues at the two Fox’s Biscuits sites every future success with an ambitious new owner.” 

Ronald Kers, chief executive of Boparan Holdings Ltd, said: “This sale is in line with our strategy and is further good news as we build on two years of strong turnaround momentum and continue to focus on our core business. It strengthens our liquidity position and reduces our leverage ahead of our planned refinance of the business.

'Positive future for brand'

“We believe the sale to Ferrero is not only beneficial for 2 Sisters Food Group, but it means a positive future for the Fox’s brand with an owner who has a compatible culture and a global reputation for high-quality branded chocolate and biscuit products.” 

The formal completion of the sale is expected on 31st​ October 2020. 

Bankers Rothschild & Co - previously named as advisers to the auction of Fox’s last year - acted as sole financial adviser to 2 Sisters on the disposal.

In recent years, several businesses have set their sights on acquiring Fox’s Biscuits, as 2 Sisters continued to streamline its core operations to improve performance. In October 2019, it announced the sale of Christmas pudding manufacturer Matthew Walker to Valeo Food group.

Commenting on the prospect of a sale of Fox’s, Julian Wild, corporate finance director at solicitors Rollits said that while Ferrero seemed like an unlikely buyer, an overseas purchaser was always the most likely candidate.

‘Not a fit for 2 Sisters’

“Fox’s is a very high quality business, but it has never really been a fit for 2 Sisters and hopefully they have achieved the right sort of price, some of which will need to go into the Northern Foods Pension Scheme,”​ Wild told Food Manufacture​.

“I really hope it works out well for a very good business – Ferrero have not had an easy time with Thornton’s, but seem like a nice company.”

The £250m price tag is down from the £350m valuation made by 2 Sisters parent company Boparan Holdings in January 2017, following an approach by a consortium of City and Wall Street Investors. However, no formal offer was made.

Previous takeover attempts

Private equity firm Towerbrook reportedly looked into purchasing Fox’s in September 2019. The company had also made moves to acquire Biscuit International in order to merge the two companies into a new European biscuit business.

In November the same year reports surfaced that 2 Sisters were to launch a formal auction of Fox’s, to be overseen Rothschild.

Meanwhile, Asda is set to increase the volume of products sourced from UK suppliers, from chicken and dairy to wheat and potatoes, following its acquisition by joint owners Mohsin and Zuber Issa and TDR Capital.

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