South African food company Pioneer Foods has announced that it would buy a 49.89% stake in major FMCG manufacturer Weetabix East Africa for an undisclosed amount.
The acquisition is expected to establish a strategic beachhead for Pioneer Foods in East Africa. It will also present an opportunity for the company to become a major player in the region’s cereal market.
Pioneer Foods Group CEO 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.”
The transaction will be the second joint venture between Pioneer Foods and Weetabix UK.
The transaction is subject to Kenyan regulatory approvals.
Founded about four decades ago, Weetabix East Africa produces breakfast cereal in the region, with the Weetabix range enjoying a significant market share.
Currently, it exports to Tanzania, Uganda and Rwanda.
Recently, Weetabix East Africa has upgraded its facility, which has enough spare production capacity to support growth in the region.
Weetabix UK Group CEO Giles Turrell said: “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."
In March last year, Pioneer Foods said that it was looking to acquire more assets in African countries following the acquisition of major stake in Nigerian firm Food Concepts, Moneyweb reported.
