Recently, there have been many examples of Chinese companies acquiring overseas brands. For instance, Biostime acquired Swisse, By-Health acquired Nature's Bounty and Maxi Nutrition from NBTY, and Ausnutria acquired Nutrition Care... However, it is less common to see a company sell off an acquired overseas brand.

Recently, China's Bright Food Group confirmed that it would sell its 60% stake in UK cereal brand Weetabix to Post Holdings, the third-largest cereal company in the US, for £1.4 billion. Previously, UK-based Associated British Foods and Italy's Barilla had both shown interest in acquiring Weetabix.

Weetabix also announced on its official website yesterday that it welcomes the acquisition by Post Holdings and believes the combination will "promote international growth opportunities."

According to Cross-border菌 (a media outlet), as early as around December 20, 2016, foreign media reported that Weetabix's performance had not significantly improved after being acquired by Bright Food Group. Based on EBITDA, its estimated selling price was close to what Bright Food paid several years earlier. Therefore, Bright Food decided to sell its controlling stake.

Bright Food quickly denied this, stating that the brand was growing rapidly and had good momentum.

In an announcement on Bright Food's official website dated November 24, 2016, it stated that since 2016, Weetabix's social media attention had been increasing, driving cumulative e-commerce sales to 23.9 million yuan, with imports exceeding 100 containers. It also opened 100 sample stores and 80 image stores offline, covering 14 key cities, achieving triple-digit growth for two consecutive years.

However, four months later, Bright Food admitted to selling Weetabix.

Oh dear, that's a bit embarrassing.

But a spokesperson for Bright Food Group said that selling Weetabix does not mean the company is giving up its global plans, but rather it will continue to advance its overseas business.

Regarding this acquisition, Post Holdings has agreed in principle to form a joint venture with Bright Food and Barings Private Equity Asia, which holds the other 40% of Weetabix, to manage Weetabix's business in China.

Post Holdings' President and CEO Rob Vitale said that Weetabix will help the company enter emerging markets, expand Post Holding's global reach, and introduce the brand to more customers in North America, South Africa, Germany, and Spain.

According to Cross-border菌, Weetabix is the second-largest cereal producer in the UK, exporting to nearly 80 countries. In 2012, Bright Food acquired a 60% stake in Weetabix for £680 million and helped it refinance £900 million in debt, setting a record for the largest overseas acquisition by a Chinese food company.

In fact, Weetabix is not the only overseas brand that has not seen significant development after being acquired by a Chinese company.

A China regional head of a North American health product brand commented that many foreign brands acquired or integrated by Chinese companies have shown lackluster results: either their products have not yet made a serious push into the Chinese market, or integration has been difficult.

First, the April 8, 2016 policy change had a significant impact on overseas brands' sales in China. Swisse, acquired by Biostime, saw its Q3 2016 revenue decline by about 15.7% year-on-year. Vitaco, an Australian brand acquired by Shanghai Pharma, also experienced considerable fluctuations in its China business in the second half of 2016.

Second, product homogenization and slow response to changes in the Chinese market are also important factors hindering the development of these overseas brands.

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