Chinese food companies: global acquisitions drive

by Editor fleischwirtschaft.com
Friday, April 25, 2014
Photo: Bernd Sterzl / pixelio.de

As part of their overall food security strategy, Chinese companies continue the acquisitions trail abroad. With fast-growing population and economic growth come key challenges for Asia in tackling food security; all occurring at a time where the planet faces key challenges of securing food supplies, according to Bord Bia.

China represents a key example of a crisis in food security, with 20% the world’s population and just 8% of its farmland. As a result, it currently ranks 42nd in food security, just ahead of Botswana.

Following on from last year’s major deal by Shuanghui - which saw China’s largest pork processor purchase America’s largest pork company, Smithfield, in a deal valued at some $7.1bn - China is both the world’s largest pork producer and consumer and is now home to the world’s largest pork company.

It has also been reported that Tnuva, Israel’s largest food company, is in the final steps of seeing Shanghai’s Bright Food Group take a controlling stake in its company. This deal is being valued in the region of $2.3bn. Tnuva is a major dairy producer in Israel. Bright will be known for taking a majority stake in UK company Weetabix last year.

Cofco, the state-owned company which is China’s largest food processing manufacturer and distributor is reported to be set to purchase 51% of the stock of the Dutch grains trader Nidera, a company reported to be worth in the region of $4bn. COFCO will be best known in Ireland as the majority stakeholder of Mengniu, one of China’s top two dairy companies. The company is quoted on the Hong Kong exchange.

Deals reported to be taking place in the other direction, from West to East, include the French dairy company Danone increasing its stake in Mengniu Dairy from 4% to just under 10%. Unilever recently took a majority stake in China’s largest water purification company Qinyuan Group.
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