CHINA – PepsiCo has announced that it will acquire 26% stake in China’s second-largest natural health food company, Natural Food International for US$131 million.
The US-based beverages and snacks giant will acquire issued ordinary shares held by minority shareholders and become the second largest shareholder after company founders who own 42% stake.
The investment signifies PepsiCo’s targeted expansion in Asia, a market it has identified as key to its growth strategy.
“Natural Food is an outstanding business with a strong growth and profitability track-record, and our investment marks an important step in our commitment to grow ‘in China, for China’,” said Ram Krishnan, CEO of PepsiCo Greater China.
“We have significant regard for the company’s founders and its management team for what they have achieved, and we are excited to work together with them to grow this company even further and create value as they make, move and sell products.”
Listed on Hong Kong stock exchange, Natural Food manufactures and sells grain, nut and berry food products with a focus on grain-based premium nutrition powder.
It is China’s second largest natural food producer by retail sales and offers products under the Wugu Mofang brand.
“We really appreciate the interest and high regard that PepsiCo has shown for Natural Food, and we are grateful for the significant effort that has been devoted by both parties in facilitating this partnership,” said Gui Changqing, chairwoman of Natural Food International Holding Ltd.
“Through our discussions, we have truly been impressed with PepsiCo’s outstanding achievements and leading position in the global food and beverage market, and we are sincerely excited about its determination to develop China’s natural health food market.
The deal is expected to unlock strategic collaboration between the two companies in areas such as branding, products, distribution, marketing and management.
The transaction is expected to close July 30.
The deal further reinforces PepsiCo’s global leadership position in food and beverages, following the recent US$1.7 billion deal for South Africa’s Pioneer Foods.
