The following press releases and media reports about Chinese companies were carried on January 15. To view a full article or story, click on the link next to the headline.
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L’Oreal Gets Greenlight To Buy Chinese Skincare Company Magic (HKEx: 1633) (English article)
China’s Bright Food To Buy Australian Dairy Firm Mundella (English article)
Chinese appetite for foreign food companies looks set to accelerate this year, with word that steamed bun giant Goubuli is nearing a deal to buy a major US coffee chain. The deal would mark the extension of a recent buying binge by Chinese food makers of overseas assets, including Shuanghui’s landmark $4.7 billion purchase of US pork products giant Smithfield last year. This latest deal is slightly different from the earlier ones because it involves a restaurant chain rather than a consumer products company, hinting at a new direction for China’s recent food-buying frenzy. Read Full Post…
Chinese firms’ addiction to distressed global assets was back in the spotlight last week with word that car maker Dongfeng Motor (HKEx: 489) is nearing a deal to purchase struggling French automaker Peugeot (Paris: PEUP). This pursuit of a global brand is consistent with Beijing’s call for Chinese firms to go global, and would certainly allow Dongfeng to quickly expand onto the world stage. Read Full Post…
Two major acquisitions of western food firms by Chinese buyers are in the news today, with more bad signs for Shuanghui’s pending purchase of pork maker Smithfield (NSYE: SFD), and word that Shanghai-based Bright Food is seeking a large deal in Israel. Perhaps I’m being a bit pessimistic, but I see both of these deals ultimately failing due to the increasingly sensitive nature of cross-border food acquisitions. Western governments seem prepared to let Chinese firms purchase locally-based makers of individual food products, such as wines or cookies. But those same governments will be far more wary about purchases lower down in their food chains, which have the potential to affect much larger segments of broader food supplies. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 4. To view a full article or story, click on the link next to the headline.
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China’s Bright Food In Talks To Buy Israeli Food Group Tnuva (English article)
Chinese milk makers must be quietly pleased about the country’s latest dairy scandal, since for once the news centers on a foreign and not a domestic firm. In this case the news has been flowing nonstop over the weekend, following a warning from New Zealand dairy giant Fonterra (New Zealand: FCZ) that some of its milk powder contains bacteria that can cause botulism, a rare but sometimes fatal illness. Fonterra discovered the bacteria in some of its powder that it sells to other dairy companies, including at least 5 Chinese companies. China has halted the import of all milk powder from New Zealand and Australia until the situation is resolved. (English article) Read Full Post…
Campbell (NYSE: CPB) maybe a household name in the west, but its famous soup cans are unknown in China where homemade broths are the norm and instant soups are a foreign concept. But that could change soon, with word that Campbell has purchased a Danish cookie company with a strong presence in China. Normally I’d say this purchase alone doesn’t mean that Campbell will necessarily use Denmark’s Kelsen as a platform to roll out its soups in China. But in this case Campbell seems to be making extra effort to highlight the China angle in its announcement of the deal, which makes such a move seem more likely. Read Full Post…
China’s Shuanghui sets the table for Smithfield buy
China’s appetite for foreign food M&A is gaining momentum with news that meat processor ShuanghuiInternational has offered to buy US pork products maker Smithfield Foods (NYSE: SFD) for $4.7 billion. The deal would be the biggest purchase ever of a foreign food maker by a Chinese firm, following a recent spate of smaller but still major deals by names like Bright Food (Shanghai: 600597). But the deal drew controversy almost as soon as it was announced, with at least one US politician and an industry group voicing their concerns about the transaction. Read Full Post…
After 2 previous failed attempts to tap the China market, French food giant Danone (Paris: DANO) is trying yet again through a new major tie-up that includes a joint venture and equity stake in tainted dairy giant Mengniu (HKEx: 2319). This time I have to commend Danone on its choice of partners and approach in the new tie-up, which seem to show it’s learned its lesson from previous disastrous partnerships with 2 other locally controlled entities. Accordingly, the third time could finally be the charm for Danone as it looks for a success in the huge but often problematic Chinese food market. Read Full Post…
Two news bits from the wine sector are making headlines, shining a spotlight on this hot industry whose fast growth is being fueled by millions of new middle class Chinese who are willing to pay big money for premium products like wine and coffee. But these latest 2 deals also reflect intensifying competition in a sector that could easily become the next bloody battlefield for over-eager Chinese start-ups, resulting in big losses and ultimately an ugly consolidation.
Shanghai’s historical place as a mixing point between east and west has burnished the city’s reputation as a hub of revolution and experimentation, which is appearing now on the breakfast table as a leading local food group tries to sell Shanghainese on western-style breakfast cereal. Shanghai watchers will know of course that I’m talking about local food superstar Bright Food Group, which has just closed its purchase of a controlling stake of British breakfast cereal giant Weetabix for more than $1 billion.
Two news bits from the wine sector are making headlines, shining a spotlight on this hot industry whose fast growth is being fueled by millions of new middle class Chinese who are willing to pay big money for premium products like wine and coffee. But these latest 2 deals also reflect intensifying competition in a sector that could easily become the next bloody battlefield for over-eager Chinese start-ups, resulting in big losses and ultimately an ugly consolidation.
Shanghai’s historical place as a mixing point between east and west has burnished the city’s reputation as a hub of revolution and experimentation, which is appearing now on the breakfast table as a leading local food group tries to sell Shanghainese on western-style breakfast cereal. Shanghai watchers will know of course that I’m talking about local food superstar Bright Food Group, which has just closed its purchase of a controlling stake of British breakfast cereal giant Weetabix for more than $1 billion.
