Premier Foods buys Mr Kipling owner RHM for £1.2bn

by Joe Lepper, Brand Republic 04-Dec-06, 09:00

LONDON - Premier Foods has agreed a £1.2bn takeover of rival RHM, the owner of some of the UK's most iconic food brands including Mr Kipling, Lyons and Hovis.

The deal will create the UK's largest food firm, worth around £2.5bn, and link RHM's brands with Premier's already extensive portfolio of well-known British food brands such as Oxo, Branston, Crosse & Blackwell and Ambrosia.

Premier said that it will pay one new share and 83.2p in cash for each RHM share as part of this latest deal, which marks a busy year for Premier, in which it has already snapped up the Campbell Soup Company for £460m and spent £172m on vegetarian food brand Quorn.

David Kappler, Premier Foods chairman, said: "This acquisition provides a unique opportunity to combine two of the UK's leading food companies to create the UK's largest food producer."

RHM's brands, most notably Hovis and Mr Kipling have been the subject of some of UK advertising's most famous campaigns and slogans, such as "makes exceedingly good cakes" for Mr Kipling.

However, the firm's advertising has also courted controversy. A 2005 TV campaign by Saatchi & Saatchi for Mr Kipling that featured a real-life birth during a nativity play was one of the most-complained-about ads that year, with the Advertising Standards Authority receiving 806 complaints.

While RHM has had a resurgence in its cake business in recent months, other brands such as Bisto gravy and Sharwood, its Indian food range, took a dip in sales due to the longer than expected warm weather during the summer.

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