Nestle Announces Chinese Confectionary Partnership
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Nestl announces that it has entered into a partnership agreement with the founding family of Hsu Fu Chi, a manufacturer and distributor of confectionery products in China, listed in Singapore (HFCI:SP). Under the proposed agreement, Nestl intends to acquire 60 percent of Hsu Fu Chi whilst the Hsu family will own the remaining 40 percent. Hsu Fu Chi's current CEO and Chairman, Hsu Chen, will continue to lead the company in the new partnership.
Nestl CEO Paul Bulcke, says, "This proposed partnership will greatly reinforce our presence in China. It combines Hsu Fu Chi's strong brands, its large portfolio of products at affordable price points, its efficient operations and entrepreneurship with our proven innovation and renovation capabilities, supported by our R&D Centres in China. It also demonstrates our long-term commitment to China and enhances our ability to grow our portfolio of international and local brands in this dynamic market."
Hsu Fu Chi's portfolio includes sugar confectionery, cereal-based snacks, packaged cakes and the traditional Chinese snack sachima. Hsu Fu Chi's products are tailored to Chinese consumers' needs and habits, and complement Nestl's existing product portfolio in China, which includes culinary products, soluble coffee, bottled water, milk powder and products for the foodservice industry. Hsu Fu Chi's large portfolio of affordable products, with the potential for enhanced nutritional value, fits perfectly into Nestl's global portfolio.
The total price to be paid by Nestl to acquire 60 percent of Hsu Fu Chi is approximately SGD 2.1 billion (CHF 1.4 billion). The completion of the transaction is subject to regulatory approval in China and certain other conditions related to the scheme of arrangement.