Tag Archives: Huiyuan

CONSUMER: Pepsi Rolls Out Oat Drink for China

Bottom line: Pepsi’s launch of a new oat-based dairy drink in China using an online promotion looks like a smart and savvy marketing move to tap growing consumer demand for healthier beverages.

Pepsi rolls out China oat drink

PepsiCo (NYSE: PEP) is taking aim at increasingly health-conscious Chinese consumers with its introduction of a new oat-based dairy drink to the market. This particular new drink, which is called Quaker High Fiber Oats Dairy Drink, is also tapping Chinese fondness for online purchasing through a tie-up that will see it sold exclusively at first through a partnership with e-commerce giant JD.com (Nasdaq: JD).

This launch seems quite gimmicky, aimed as much at gaining publicity as it is at introducing a product that consumers will really want. But that said, Chinese consumers do seem to love a good gimmick, especially when it involves hip and trendy online activity. That fact has been reflected in the huge success of Single’s Day, an online shopping extravaganza created by Alibaba (NYSE: BABA), and the phenomenal success of smartphone maker Xiaomi, which for its first few years sold all of its products online only. Read Full Post…

CONSUMER: Coke Tries China M&A Again With Protein Drink Maker

Bottom line: Coke’s proposed $400 million purchase of a Chinese protein drinks maker is likely to get quick regulatory approval, and could make significant contributions to its China operations within the next 2 years.

Coke makes new China M&A bid

Six years after a high-profile failure for a major China acquisition, global beverage giant Coca Cola (NYSE: KO) is trying once again with a smaller plan to buy a Chinese maker of protein drinks. This latest play for the maker of China Green-brand drinks looks like a smarter move by Coke, since the deal is valued at a relatively modest $400 million. By comparison, Coke’s failed attempt to buy leading Chinese juice maker Huiyuan (HKEx: 1886) was valued at $2.3 billion, which drew strong scrutiny from China’s anti-monopoly regulator that ultimately vetoed the deal in 2009. Read Full Post…

CONSUMER: Starbucks, Tingyi Heat Up Bottled Beverage Market

Bottom line: Starbucks’ new tie-up with mass-market food maker Tingyi looks like a smart partnership that could help the pair quickly develop China’s largely untapped market for premium bottled beverages.

Starbucks, Tingyi tie on bottled drinks

Following its phenomenal success in China’s retail dining market, US coffee giant Starbucks (Nasdaq: SBUX) is taking aim at bottled beverages in a new tie-up with one of the nation’s leading food product makers. The pairing is a big odd on the surface, bringing together the premium-minded Starbucks with Tingyi (HKEx: 322), a Taiwanese company whose main Master Kong brand is synonymous with tasty but decidedly low-end instant noodles.

But then again, nobody ever dreamed that Starbucks could overcome the huge odds against it by not only convincing tea-minded Chinese to drink coffee, but also getting them pay handsomely for the privilege. Accordingly, I would give the company a fairly strong chance for working similar magic in the highly competitive bottled beverage space, which would provide a huge new source of revenue from its China business. Read Full Post…

Yum’s Little Sheep: Tasty Food Or Indigestion?

Little Sheep growth stalls during Yum review

An interesting new Chinese media report is questioning whether US fast food giant Yum (NYSE: YUM) is spoiling the Little Sheep chain of hot pot restaurants it acquired just a year ago. The numbers released by Yum certainly don’t look very so-so, and comments by an unnamed restaurant official don’t paint a very rosy picture either for Little Sheep under Yum’s management. But it’s probably still too early to say whether this acquisition will be a success, and I would still be willing to bet we’ll see Little Sheep start making some new and exciting moves later this year. Read Full Post…

China Flexes Regulatory Muscle With Dole, LCDs 罚款与搁置审批 中国监管部门开始发力

Two new cases are showing how Chinese regulators are becoming increasingly assertive in the global marketplace, with Beijing agencies fining the world’s top LCD makers for price fixing in one instance and holding up a major sale by global US fruit giant Dole Food (NYSE: DOLE) in the other. The former case, which involves Korea’s Samsung Electronics (Seoul: 005930) and LG Display (Seoul: 034220) and 4 Taiwanese firms, looks like a very tentative step for China into an arena that is already strictly patrolled by western regulators who combat market manipulation. The latter case is a bit more interesting and potential troublesome, as it has slightly political overtones that could be the result of recent tensions between China and Japan over a territorial dispute.

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China Approves Google’s Motorola Buy 中国批准谷歌收购摩托罗拉

I have to admit that perhaps I was wrong in my initial skepticism about Beijing’s motivations in repeatedly delaying approval for Google’s (Nasdaq: GOOG) purchase of Motorola Mobility (NYSE: MMI), speculating that its foot-dragging might have been motivated by political factors. (previous post) But now that the anti-monopoly regulator has finally approved the deal, I feel like I should actually congratulate it for addressing an important concern that was probably the real source of the delays, namely the potential that Google might give Motorola phones preferential treatment for its Android smartphone operating system at the expense of other major handset makers who also rely heavily on the popular OS. The long-awaited approval, which was delaying closure of a $12.5 billion deal first announced last August, finally came after Google agreed to conditions required by the Chinese regulator aimed at making sure that Android remains open and free to everyone, and that Google treats all cellphone makers who chose to use the operating system equally. (English article) I’ll be the first to admit that my first reaction to most actions by China’s anti-monopoly regulator is one of skepticism, since it has a history of allowing political considerations into its decisions that are largely unrelated to its main mission of ensuring that major M&A deals don’t harm market competition. The regulator’s bias was on glaring display in 2009, when it vetoed Coca Cola’s (NYSE: KU) plan to buy leading domestic juice maker Huiyuan (HKEx: 1886), citing monopolistic concerns even though most observers believed that Beijing simply didn’t want to see the promising domestic brand swallowed up by a foreign company. The regulator seemed to be changing its ways last year when it approved the purchase of another promising Chinese brand by a foreign name, in this case allowing Yum Brands (NYSE: YUM), operator of the KFC and Pizza Hut chains, to buy Little Sheep, operator of China’s largest hot pot restaurant chain. (previous post) The delays behind this latest approval of Google’s purchase of Motorola look like a smart move to me, aimed at addressing the very real concern by many of Android’s users that they might lose access to the OS if Google gives preferential treatment to Motorola. The major regulators in the US and Europe were unlikely to focus on this particular concern, since most of the major cellphone makers that use Android are based in Asia, such as Taiwan’s HTC (Taipei: 2498) and Korea’s Samsung (Seoul: 005930). A growing number of Android users are also in China, most notably Huawei and ZTE (HKEx: 763; Shenzhen: 000063), which are 2 of the world’s fastest growing players in the smartphone space. Thus the regulator was clearly addressing very real concerns from these and other domestic smartphone makers about becoming second-class Android citizens after a Google-Motorola merger, hence the regulator’s decision to impose its conditions. At the end of the day I’m quite encouraged by this action, and increasingly confident that we’ll see more decisions from the regulator based on market concerns rather than political considerations.

Bottom line: China’s long-delayed approval of Google’s Motorola purchase was due to real anti-competitive concerns, and reflects growing maturity at the Chinese regulator.

Related postings 相关文章:

Huawei-Motorola Rumors Look Logical 华为收购摩托罗拉手机业务传言看似合情合理

Google Tussles With China on Motorola 延迟批准摩托罗拉移动交易 中国政府对谷歌仍心存芥蒂

Little Sheep Gets Swallowed: Good for Yum, Good for China M&A 小肥羊被收购对百胜和中国是双赢

China OKs Nestle Buy, Opens Door for Big Brand M&A

Following its landmark decision last month to let KFC operator Yum Brands (NYSE: YUM) purchase Little Sheep (HKEx: 968), China’s largest hot pot chain, Beijing has once again approved another foreign acquisition of a domestic big brand, this time allowing Nestle (Switzerland: NESN) to buy candy maker Hsu Fu Chi (Singapore: HSFU), a move that should encourage more such M&A. (English article) China’s controversial 2009 decision to veto the purchase of leading domestic juice maker Huiyuan (HKEx: 1886) by Coca Cola (NYSE: KO) sent a chill through the cross-border M&A market for major Chinese brands, as many interpreted the move — theoretically made on anti-monopolistic concerns — as a nationalistic reaction by Beijing technocrats reluctant to see a promising domestic name swallowed up by a foreign multinational. The veto created so much concern that it took more than 2 years for another company, Yum, to try a similar acquisition, again testing Beijing’s commitment to free trade and openness to letting its healthy companies get acquired by foreigners. This rapid succession of approval for the acquisition of Little Sheep followed by Hsu Fu Chi, Nestle’s biggest purchase in China to date, seems to indicate that China will take a more balanced approach to foreign M&A of its healthy brands in the future, which could provide a nice lift for stocks in other listed big brands like Huiyuan that enjoy a strong reputation in China. Of course, China will now expect reciprocal treatment in the West, such as for Shanghai-based food maker Bright Food’s pending acquisition of Australia’s Manassen, announced in August. (previous post)  I don’t see any problems for this kind of cross-border M&A in popular consumer areas like food and restaurants, though the tech space may continue to be sensitive as evidenced by the derailment of Huawei’s planned purchase of a small US tech firm early this year. (previous post) All that said, this latest approval by China’s anti-monopoly regulator should breathe some healthy new life into cross border M&A in the consumer sector, bringing good news for both acquirers and acquisition targets both inside and outside China.

Bottom line: China’s approval of the sale of a leading candy maker to Nestle reaffirms its new commitment to allowing big consumer brands be purchased by Western firms, paving the way for more such acquisitions.

Related postings 相关文章:

Little Sheep Gets Swallowed: Good for Yum, Good for China M&A 小肥羊被收购对百胜和中国是双赢

Bright Finally Finds Tasty M&A in Australia’s Manassen 光明食品终於觅得“佳偶”

Huawei quits 3Leaf buy, but stay tuned for more

Little Sheep Gets Swallowed: Good for Yum, Good for China M&A 小肥羊被收购对百胜和中国是双赢

Some 7 months after Yum Brands (NYSE: YUM) first announced its bid to buy leading hot pot chain Little Sheep (HKEx: 968), China’s anti-monopoly regulator has finally approved the deal, in a major breakthrough not only for Yum and Little Sheep but also for China. (company announcement) This deal looked smart for both Yum and Little Sheep from the start, but investors had worried that the Commerce Ministry would use the anti-monopoly excuse to veto it over concerns that were more nationalistic in nature. Such a veto, which had led Little Sheep’s Hong Kong-listed shares to trade well below Yum’s offer price, would have sent a chill through the market, demonstrating that China was unwilling to let its best-known brands be purchased by foreign buyers following the Commerce Ministry’s 2009 veto of Coke’s (NYSE: KU) purchase of Huiyuan (HKEx: 1886), China’s leading juice brand. Interestingly, Huiyuan’s shares shot up 16 percent as well after approval of the Yum-Little Sheep deal, as investors bet that perhaps Huiyuan itself could become a takeover target again under the Commerce Ministry’s new enlightened approach, perhaps by Coke rival Pepsi (NYSE: PEP), which announced a major overhaul of its own China strategy earlier this week. (previous post)  Following the Little Sheep decision, I would expect to see strong gains in shares of not only Huiyuan but also other up-and-coming Chinese brands in the weeks ahead, as investors bet that they could also now become takeover targets. Likewise, we could also see gains in shares of mid-sized Western consumer brands, as Western governments will now also be under pressure to approve such deals to show their own commitment to fair trade. As to Yum and Little Sheep, I would look for rapid expansion for the Chinese hot pot chain both at home and perhaps even abroad towards the end of next year, after Yum, China’s largest fast-food operator through its KFC brand, has a chance to learn more about the company and formulate a plan to leverage its strong name and popular hotpot format.

Bottom line: China’s approval of Yum’s purchase of Little Sheep will open the door to more buying of well-known consumer brands by both Western and Chinese firms in each other’s markets

Related postings 相关文章:

Little Sheep Left Waiting at Regulator’s Door 小肥羊仍在监管机构大门外苦等

Yum China: Little Sheep Getting Tangled in Trade Friction? 百盛收购小肥羊案卷入中美贸易摩擦?

◙  Yum Feasts on China, Still Eying Little Sheep 百胜依然觊觎小肥