PepsiCo acquiring 26% stake in China’s second-largest health food producer
July 30, 2019 Category China News Round-up, Weekly
American beverage and snacks producer PepsiCo has agreed to buy a 25.8% stake in Natural Food International, China’s second-largest health food producer, for HKD1.02 billion, becoming the company’s second-largest shareholder. Natural Food said it was PepsiCo’s “first strategic investment in China”. Gui Changqing, Chairman of Natural Food, said in a statement that the tie-up with PepsiCo would help the company to grow its consumer base.
“I believe the tie-up will lead to a multidimensional partnership between Natural Food and PepsiCo that will encompass brand building, product development, distribution and sales,” said Gui. “The partnership will eventually increase our company’s market share and promote our brand awareness.” Shares of Natural Food surged as much as 35% before ending up 14% after the news became public. Ram Krishnan, Chief Executive of PepsiCo’s Greater China region, pledged to work with Natural Food to create “added value” in the areas of production, logistics and distribution, according to a statement from Natural Food. The company is China’s second-largest healthy food processor in terms of sales, trailing Nanfang Black Sesame, according to research firm Frost & Sullivan.
Founded in 2006, Shenzhen-based Natural Food, through its subsidiaries, processes and distributes natural food products made of grains, beans, nuts and dried fruits. Last year the company recorded sales of CNY1.82 billion, up 15.4% from 2017. Net profit for the year rose 13% to CNY213 million. China’s health food industry was estimated to grow 13% to CNY116.5 billion in 2018, according to business advisory firm ASKCI Consulting. American investors channelled USD1.63 billion into Chinese companies in the first six months of this year, a drop of 16.4% from a year ago, according to China’s National Development and Reform Commission (NDRC).
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world