Associated British Foods is understood to have entered an agreement to acquire up-market cereal brand Dorset Cereals.

An industry source said that the deal – which is yet to be confirmed by the company – remains subject to regulatory approval.

ABF is said to have agreed to pay current owner Wellness Foods GBP50m (US$83.8m) to secure the brand.

Speculation emerged at the beginning of April that Wellness could be preparing to sell the business.

While Welless did not confirm that it had put Dorset on the block, the company did reveal that it had received interest from a number of companies. ABF, Bright Food controlled Weetabix and Kellogg were touted as potential suitors for the brand. 

ABF did not immediately respond to requests for comment this morning.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

ABF has been working to improve the fortunes of its grocery business. The company started to see profits at the unit improve in the back half of last year and, in its most recent trading update, ABF booked a 100 basis point margin improvement and 3% sales rise for the first half of this year.

Commenting on the rumours, Panmure Gordon analyst Graham Jones told just-food that the Dorset Cereals brand was a good buy for the company.

“I think Dorset is a great brand, with good growth potential and will be an excellent fit with ABF’s existing Jordan’s brand. I understand sales are circa GBP40m and as such the rumoured price represents a very good price.”