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People's Daily Online>>China Business

Food companies show appetite for growth through overseas M&A

By Shen Jingting (China Daily)

14:46, March 08, 2012

Global food and beverage companies are likely to be the next major targets for Chinese enterprises pursuing overseas mergers and acquisitions, since tough global economic conditions are creating takeover opportunities.

Major domestic food and beverage companies, such as COFCO Group and Bright Food Group Co Ltd, have shown great interest in expanding overseas and purchasing assets, especially in the dairy, wine and sugar industries.

Bright Food, which runs China's biggest sugar production and distribution business and operates Bright Dairy, an industry leader, is negotiating with a French wine company about a potential acquisition, according to Ge Junjie, vice-president of Bright Food.

Ge declined to identify the French company but said talks were going well.

"Bright Food is determined to be a global player. We hope to introduce the world's premium foods to the Chinese mainland, where demand is huge," said Ge.

He commented on the sidelines of the annual session of the Chinese People's Political Consultative Conference in Beijing.

Ge said Chinese people are displaying stronger demand for safe, high-quality food as their incomes rise and as they become more aware of safety issues.

The global economic downturn has created an "extremely good opportunity" for Chinese buyers, according to Ge. He said that in the past one to two years, many foreign food companies had contacted Bright Food to discuss potential cooperation.

"It's a good thing for both sides. China's big market and Bright Food's strong distribution network lure them. Meanwhile, they can help Bright Food extend its lead in China and tap overseas markets," said Ge.

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