Two Foreign Investors Bid For China's Largest Food-Processing Company

CHINA - Two foreign investment firms are bidding to take over China's biggest food-processing company, Henan Luohe Shuanghui Industry Group, in a sale that could reach up to RMB1.5 billion (US$187 million).
calendar icon 20 April 2006
clock icon 2 minute read
Take me to eFeedLink The minimum bid has been set at RMB1 billion (US$125 million), according to information provided by China Beijing Equity Exchange, which is organising the sale.

If successul, the acquisition would be the second largest foreign acquisition of a Chinese company this year.

The Luohe government-owned company gained net profits of about about RMB$107 million (US$13.3 million) for 2005 and plans to finalise a sale this month.

Goldman Sachs and CCMP Capital Asia, previously known as JPMorgan Partners Asia, are the two reported bidders.

The Shuanghui group, owns 36 percent of Shanghai-listed Henan Shuanghui Investment & Development Co, a leading Chinese meat processor with sales of more than RMB20 billion (US$249 million) in 2005.

The high price reflects a growing interest in China's food industry. Foreign investors hope to cash in on China's fast-growing consumer purchasing power as the raw meat and processed-meat production in China have been growing at an annual average of about 6 percent for the past five years, according to China's National Bureau of Statistics.

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