United Biscuits could be the next iconic British firm to be snapped up by a foreign buyer, posing a fresh problem for embattled business secretary Vince Cable.
China’s Bright Food Group has its eye on a $3.2bn (£2bn) bid for the maker of Jaffa Cakes and McVities biscuits.
Cable has campaigned for tougher regulation to make it more difficult for foreign firms to buy UK companies after Kraft’s controversial takeover of Cadbury earlier this year.
However, he appears to be powerless to stop the deal going through if owners Blackstone and PAI Partners decide to cash in on the business they bought for £1.6bn four years ago.
It would be the first time a Chinese firm has taken outright control of a major European food firm.
Bright Food has hired Rothschild to help broker the deal, although both firms declined to comment.
It is understood US-based Blackstone and French PAI had been planning an auction for the firm but are now in exclusive talks with Bright Food. Other parties linked with the group included Kraft and Campbell Soup.
United Biscuits has struggled in recent years, with analysts criticising it for failing to take the initiative in emerging markets.
The Chinese firm, which recently lost a bidding war for Australian sugar refiner CSR, has a diverse portfolio that includes a taxi business in Shanghai, ham and milk production facilities, a property empire and a tourism business.
Despite being formed just four years ago, Bright Food now has sales topping £4.3bn and profits of £200m.
United Biscuits employs 7,000 people in Britain at 11 factories.
The company, which has been in business for over 100 years, has other of well-known brands including Jacob’s, Carr’s, McCoy’s and Hula Hoops.
United Biscuits grew its profit for a fifth straight year in 2009, when its earnings grew by 13.7 per cent to £223.4m. That year, the firm notched a 5.1 per cent rise in its revenues to £1.3bn. The food firm in recent years has made inroads to the US and Australian markets.