Wahaha leads bidding for United Biscuits’ snacks business

Chinese food and beverage firm Wahaha is leading in the bidding race to acquire UK-based United Biscuits’ snacks business, KP Snacks, for £520m.

The owners of United Biscuits, US private equity firm Blackstone and the French buy-out firm PAI Partners, are being advised by Swiss financial services company Credit Suisse, reported The Sunday Telegraph.

Blackstone and PAI Partners have sent a four-page sales document to potential buyers including Wahaha and cereal company Kellogg, and the final information memorandum will be sent on 3 September 2012.

Recently, United Biscuits completed the separation of its snacks business from the rest of its operations, and appointed the current president of Kraft Foods UK/Ireland Nick Bunker as the new chief executive officer, who will take charge on 1 September 2012.

The snacks division includes several brands such as McCoy’s potato chips, Hula Hoops, Mini Cheddars and KP Nuts and has four factories in the UK, with a workforce of around 1,500.

The sale of the rest of the business, which represents nearly two-thirds of the company’s sales and sells products including biscuits and cakes, is not likely to be initiated until 2013, reported Financial Times recently, citing people familiar with the matter.

In July 2010, Blackstone and PAI attempted to sell United Biscuits by appointing JPMorgan and Goldman Sachs, a move which attracted companies such as Kellogg’s, Kraft Foods, Campbell Soup and China’s Bright Foods.

However, the sale failed to materialise despite Bright Foods entering into exclusive talks over the acquisition that valued the UK company at £2.5bn, including debt.

United Biscuits, which was bought by Blackstone and PAI for £1.6bn in 2006, has 11 facilities in the UK.

Wahaha, which owns 60 production bases in 29 provinces in China, employs 30,000 people and posted a turnover of £6.8bn in 2011.