UNITED Biscuits, which developed out of two Scottish family firms and employs hundreds of people in Glasgow, sold its Southern European operations to Kraft in what may be followed by further, significant disposals by the snacks giant.
Kraft has ramped up efforts to expand in faster-growing markets by agreeing to buy the Spanish and Portuguese arms of United Biscuits, which is renowned in the UK for brands such as Jaffa Cakes.
Headquartered in Illinois, Kraft is paying around dollars-1.07bn (GBP582m) in a deal underwhich it will also gain control of rights to the trademarks for Nabisco products, including Oreos in the European Union and other territories.
United Biscuits claims about 26-per cent of the market for biscuits in Spain and 37-per cent of the market in Portugal. These markets are growing faster than some others that Kraft is in.
Kraft said the operations in Spain and Portugal, which included leading local biscuit brands such as Fontaneda and Tiufino, turned over GBP217m in 2005.
A variety of other businesses in markets such as canned meat are included in the deal.
The cashless transaction also gives Kraft the rights to all Nabisco trademarks in the European Union and other areas.
United Biscuits has held the right to those trademarks in the EU, Eastern Europe, the Middle East and Africa since 2000, when it purchased them from Nabisco, six months before Nabisco was bought by Kraft.
Kraft will exchange the 25-per cent stake it acquired in United Biscuits when the company was bought by a consortium in 2000 for the businesses it is acquiring and will also assume GBP298m of debt.
Kraft will post a GBP132m noncash gain from its investment in United Biscuits and expects the deal to be earnings-enhancing this year.
The businesses represent about 18-per cent of the sales of United Biscuits, which declined to comment on reports that the disposal may be followed by the sale of the northern Europe unit.
Successful disposals would allow other members of the consortium which acquired United Biscuits for GBP1.25bn six years ago - including private equity groups Cinven, PAI and MidOcean - to exit their investment profitably.
The UK business is distinct from the north European arm. However, a sale of that business will be noted in Scotland, where United Biscuits was founded in 1948 following the merger of Edinburgh's McVitie & Price and MacFarlane Lang.
United expanded across the world, but remained registered in Scotland and continued to hold its general meeting in Edinburgh in the 1980s. It is now headquartered in Hayes, Middlesex.
Although it sold off several Scottish businesses, United retained a significant manufacturing presence in Glasgow, where 700 people work at a McVities plant at Tollcross.
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