Permira, a UK buy-out group, has beaten Kerry Group and other rivals in the race to buy Unilever's Birds Eye and Igloo brands with a €1.5 billion bid.

The group hopes to create a European frozen foods business worth more than €3 billion after winning the auction for the brands.

Permira outbid CapVest - a rival private equity group that owns FoodVest, a holding company that includes Findus frozen foods in Norway, Sweden and France as well as the UK's Young's Bluecrest Seafood.

Combining FoodVest with Birds Eye and Igloo to create a business with close to €3 billion in sales is a logical next step, according to industry analysts that have forecast synergies of close to €100 million.

"It is possible [ Permira] will do back-to-back deals," a person who took part in the auction said. "They bought the Unilever business because they want to play a role consolidating the sector."

CapVest, which had attempted to create an enlarged European frozen food business, may look to offload FoodVest at a price of up to £900 million (€1.33 billion). Blackstone and JPMorgan Partners, another under-bidder for the Unilever business, had also looked to create a large European frozen food business.

"The only sensible buyer of FoodVest is Permira and they are a well-financed private equity firm," the person added.

Further out, the enlarged business would be a logical flotation candidate in three or four years.Barring last-minute hitches, Unilever was due to sign a sale agreement with Permira, advised by Spayne Lindsay and Lehman Brothers, this weekend, with an announcement shortly after.

CapVest's bid lost some momentum this month when partners Kohlberg Kravis Roberts and CVC Capital, the buy-out groups, dropped out. CapVest also lost Martin Glenn, the former PepsiCo head it had hired to manage the business.