Nestlé, the Swiss food group, is set to acquire Hsu Fu Chi, the Chinese sweets company, for S$2.1bn (US$1.7bn) in a deal that marks one of the largest foreign acquisitions in China and underscores the race for the country’s food sector.
The Swiss group plans to purchase 60 per cent of Singapore-listed Hsu Fu Chi, with the remaining 40 per cent to be owned by four Taiwanese brothers who founded the company. If the deal is approved by regulators and shareholders, the stock will be delisted, with Nestlé and the Hsu brothers operating the company as a joint venture.
China’s food market is becoming a hot target for foreign investment, as rising incomes feed a growing appetite for packaged foods. China’s confectionery market alone is worth more than $9bn a year, according to Euromonitor.