Nestle in talks to buy Chinese snack and candy maker Hsu Fu Chi International: report
02 Jul 2011
Nestle SA, the world's largest food company, is in talks to buy Chinese snack and candy maker Hsu Fu Chi International Ltd, Bloomberg reported citing people familiar with the matter.
The Swiss foods giant has been in on-and-off talks with Fu Chi for about two years, the agency said and added that it was not clear that Nestle would manage to conclude a deal as other suitors have also been talking to the Singapore-listed company, which has a market value of about $2.6 billion.
Founded in 1992 by four Taiwanese brothers, Dongguan, Guangdong-based Hsu Fu Chi makes candies, cakes and sachima pastries. The company also produces and sell nuts, groceries, and food additives, processes agricultural products, produces and sells plastic products and plastic packaging materials, as well as is in the business of production, storage, and sale of foodstuff, fruits and vegetables, processed meats, and poultry and food commodities.
The company reported profit of 602.2 million yuan on sales of 4.31 billion yuan last year. Its shares have risen 72 per cent in the past year, giving the company a market capitalisation of $2.6 billion, according to Bloomberg data.
Nestle, the maker of Kit Kat brands, Nescafe among many others, has been able to grow revenues from $118.6 billion in 2009 to $123.4 billion last year and also increase its profits from $12.3 billion to $40.4 billion for the same period.
The company that was holding about 16 billion francs in cash at the end of last year by selling its majority stake in Alcon, generated about a 10th of its 2010 revenue from its chocolate and confectionery unit.
Frits van Dijk, head of the company's business in Asia, Africa, Oceania and the Middle East, said last month at an investor conference that the company aims to increase its sales in emerging markets by at least 8 to 10 per cent a year in order to reach its goal of generating around 45 per cent of revenue from the region by 2020.
