Shanghai municipal government-owned food producer Bright Food Group Co. is planning to acquire the sugar and renewable energy business of Australia's CSR Ltd. for cash, up to A$1.5 billion (US$1.4 billion).

CSR is a major building materials manufacturer with large sugar business and investments in aluminium, with operations throughout Australia as well as in Asia and New Zealand.

Analysts see this move as a sign of China's investment interests in Australian firms, diversifying beyond the energy and mining sectors.

Chinese companies have been on a spending spree, snapping up assets ranging from real estate to car makers, taking advantage of the depreciation in valuations owing to global economic downturn.

Bright Food vice-president Ge Junjie said the company was keen to invest in the Australian food industry, particularly in sugar.

''We would welcome the opportunity to work directly with CSR Ltd to discuss and hopefully finalise the details of a potential acquisition by Yantang of the sugar assets held by CSR Sugar,'' Ge said.

''This acquisition aligns with Bright Food's long-term strategy to build resource-related businesses which also include food-related, dairy, wine and nutrition products,'' he said adding that we have written to the chairman of CSR Ltd, Ian Blackburne, this morning, and are hopeful of a prompt and positive response.

''We believe our proposal for a potential acquisition of CSR Sugar for cash would be a much more attractive and significantly more secure alternative to the current plan by CSR Ltd to demerge its sugar assets.''

CSR, though, issued a statement today describing Bright Food Group's statement as "merely an expression of interest and does not make any proposal capable of acceptance by CSR".

"Bright Food Group had previously expressed to CSR an interest in the sugar business however, its expression of interest similarly lacked certainty as to value, timing and likelihood of completion," the food and materials company said in a statement to the Australian Securities Exchange.

CSR said the company will consider a range of options surrounding its proposed demerger, which is still ongoing.

In June 2009, CSR announced its intention to split into two companies, with one holding its sugar and energy businesses - to be dubbed Sucrogen - while the other will contain its building products operations.

CSR's investors were scheduled to vote on sugar demerger in February, with the transaction expected to be completed in March subject to remaining due diligence and other approvals.

It also raised $375 million in capital to help cover write-downs from its glass business Viridian and to lower the company's debt to under $1 billion from $1.2 billion.

Shanghai-based Bright Food describes itself as a ''large conglomerate'' in China's food industry, with annual revenues of 45 billion yuan ($7.1 billion) in 2006 - the same year it was founded, according to the company's website.

Bright Food's brands include Big White Rabbit sweets, one of China's most famous brands, while it also produces dairy, sugar and meat goods, and operates supermarkets and other retail outlets.