Post Holdings (POST - Get Report) added healthy British cereal Weetabix to its breakfast bowl on Tuesday, buying the brand from China's Bright Food Group for $1.76 billion, in a deal the St. Louis maker of Shredded Wheat, Grape Nuts and Fruity Pebbles said will contribute about £120 million ($151 million) a year to earnings before interest, taxes, depreciation and amortization.
Post's share rose in after hours trading late on Monday as rumors of a deal began to circulate. At the end of trading it was up 0.87% at $87.86.
The deal comes just five years after Shanghai-listed Bright Food first bought Weetabix from private equity owners Lion Capital for £1.2 billion at a time when it was looking to awaken the Chinese consumer to alternative breakfast flavors.
But while the traditional wholegrain cereal is so well loved in the U.K. that it carries a royal warrant - meaning it is an approved supplier to the household of Queen Elizabeth II - it failed to catch on with Chinese consumers. Congee and other savory dishes are still the preferred start to the day in China.
Bright Food put the breakfast brand up for sale with Goldman Sachs last year and reportedly attracted interest from Cereal Partners, a joint venture between Nestle (NSRGF) and General Mills (GIS - Get Report) , as well as the U.K.'s Associated British Foods (ASBFF) and the Italian pasta maker Barilla.