Pioneer Foods Group Limited announced today that it would acquire a 49.8% stake in major FMCG manufacturer Weetabix East Africa Limited for an undisclosed amount. This will establish a strategic beachhead for Pioneer Foods in East Africa and the opportunity to build a significant cereal position in the region.
The joint venture will see Pioneer Foods in partnership with Weetabix UK Limited, who expands their share to a controlling interest. This will be the second JV between Pioneer Foods and Weetabix UK.
Founded about four decades ago, Weetabix East Africa produces the number one breakfast cereal in the region, with the Weetabix range enjoying a significant market share. The company currently exports to Tanzania, Uganda and Rwanda. The facility is well managed with highly trained staff, and has a recently upgraded plant with sufficient spare production capacity to support growth in the region.
Group CEO of Pioneer Foods Phil Roux said: “This acquisition represents a rare opportunity for Pioneer Foods to enter the East African market with a credible partner and a profitable branded business.”
“We believe there is strong category growth potential in this market, driven by an emerging middle class as well as by convenience-driven consumer trends. The per capita consumption of breakfast cereals in Kenya suggests good growth potential, with the added benefit of accelerating growth in neighbouring countries.”
Says Giles Turrell, Group CEO of Weetabix UK: “The business will provide a platform to introduce the wider Pioneer Foods basket, through an established and well developed route-to-market in Kenya and neighbouring countries."
The transaction is subject to Kenyan regulatory approvals, which is standard for a transaction of this nature.
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