British food manufacturer Premier Foods has abandoned plans to divest its rice pudding and custards brand Ambrosia.

The company revealed its decision to sell the unit in November 2018 in order to focus on brands such as Batchelors.

Premier Foods has been engaged in detailed negotiations with a small group of potential buyers since the beginning of 2019.

However, the company’s board decided that the existing business climate will not lead to a satisfactory financial outcome upon the brand’s divestment.

Premier Foods, which produces cakes under Mr Kipling brand, blamed a tough business climate that could have dented the deal value.

“The Ambrosia factory is a major employer in this part of Devon and its long-term future is vital to the existing workforce and the local community.”

Unite, which is Britain and Ireland’s largest union, welcomed the company’s decision not to sell Devon Ambrosia factory.

The trade union represents 300 workers at Ambrosia’s factory in Lifton, south Devon.

Unite regional officer Mark Richards said: “Premier Foods’ announcement is good news for the workforce, who have experienced three months of uncertainty about their future.

“Unite will now be seeking urgent meetings with Premier Foods to seek strict assurances that the company is now fully committed to the long-term future of the factory and its workforce.

“The Ambrosia factory is a major employer in this part of Devon and its long-term future is vital to the existing workforce and the local community.”

The company put its Ambrosia brand up for sale in order to reduce its debt, which is reported to be more than £500m.

Premier Foods is said to be under pressure from an activist investor after the company failed to control the sliding share price following a proposed takeover by US food maker McCormick & Cofell two years ago.

Last year, the company’s stock fell more than 22%.

The British firm launched a two-year plan, under which Premier Foods has been cutting costs by laying off people and streamlining its warehousing and distribution network.

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