Bright Food says it’s doing due diligence on Europe acquisition

Source:Reuters-Global Times Published: 2015-3-9 23:48:02

China's Bright Food Group Co has started work on an acquisition in Europe and sees more opportunities in the region to expand its rapidly growing international business, the vice president of the State-owned company said.

The company, which bought British cereal brand Weetabix in 2012, has started due diligence on a "project" in Europe, which could be completed by July or August, Ge Junjie told Reuters.

The deal, if completed, would be the latest in a multi-billion dollar overseas acquisition spree by Bright Food, reflecting the growing buying power of Chinese companies around the world and rising demand from Chinese consumers for higher value, international products.

Ge declined to give details on the country or sector that is being targeted but said the company was looking for a deal similar to Manassen, the Australian business bought in 2011 that represents both its own brands and other imported brands.

"I believe we're more focused on establishing a regional brand agency and owner, instead of buying one brand of sweets or one brand of chocolate in Europe," said Ge.

The upcoming deal would, however, be cheaper than Manassen, he noted. Bright bought a 75 percent stake in the firm for A$530 million ($413.7 million).

Ge said China's dairy sector still had significant room for growth, despite analysts saying high prices may have choked some consumption in 2014, reducing demand for imported milk powder and pressuring local suppliers.

Average per capita dairy consumption in China is a long way behind that of Western markets, he said.

Bright plans to use global capital markets to raise funds for its acquisitions, with work underway to list Manassen Foods, said Ge.

Overseas units made up just over 10 percent of the firm's business in 2014, and are targeted to reach 25 percent within five years.

The company also wants to enter the North America and Southeast Asian markets.

Bright has four listed subsidiary firms in China - Bright Dairy and Food Co Ltd, Shanghai Jinfeng Wine Co Ltd, Shanghai Haibo Co Ltd and Shanghai Maling Aquarius Co Ltd.

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