Swiss Food Giant to Acquire Chinese Sweetmaker
Food giant, Nestle was given the go ahead to acquire Chinese sweet maker, Hsu Fu Chi International that is one of the biggest foreign takeovers of a Chinese company. In July, Nestle agreed to purchase a 60 percent stake in the Singapore listed Hsu Fu Chi for 1.4 billion francs, boosting the company’s footprint in China.
Just this week the Chinese commerce ministry approved the deal, in which Euromonitor analysts are saying will make Nestle the second largest confectionery player in China in terms of retail sales. The acquisition is the latest successful foreign takeover of a major Chinese brand, just after the Chinese commerce ministry also approved the buyout of the Chinese hot pot chain Little Sheep by U.S. fast food giant Yum Brands, owner of Pizza Hut and KFC.
The Chinese Government has also blocked several foreign takeover deals. In 2009 the Chinese Government didn’t approve Coca Cola’s bid of US$ 2.4 billion to takeover beverage maker Huiyuan Juice Group with reasons stating that the deal will have led to higher prices and a smaller choice of products for consumers.
China’s anti monopoly laws require firms to receive government approval before merging with other companies if their combined global revenues are more than 10 billion yuan or their revenue in China tops 2 billion yuan.