Nestle to partner with Hsu Fu Chi in China
In an effort to reinforce its presence in China, Nestle has entered into a partnership agreement with the Chinese confectionery company Hsu Fu Chi.
Under the proposed agreement, Nestle intends to acquire 60% of Hsu Fu Chi, and the Hsu family will own the remaining 40%. Hsu Fu Chi’s current ceo and chairman, Hsu Chen, will continue to lead the company in the new partnership.
Nestle ceo Paul Bulcke says the deal demonstrates his company’s long-term commitment to China, and enhances its ability to grow Nestle’s portfolio of international and local brands in the dynamic market.
“[The proposed partnership] 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 Centers in China,” Bulcke says.
Chen says his company is delighted to partner with Nestle.
“They offer the recognition and the strength and quality of our company and a very attractive proposition for our shareholders,” Chen says. “Together with Nestle, we will accelerate the development of the Hsu Fu Chi brand, its production and distribution capabilities and ensure Hsu Fu Chi’s continued growth momentum and brand legacy for the future.”
The completion of the transaction is subject to regulatory approval in China and other conditions related to the scheme of arrangement.
Hsu Fu Chi’s portfolio includes sugar confectionery, cereal-based snacks, packaged cakes and the traditional Chinese snack, sachima, which typically is made of flour, butter and rock sugar or candy. The company’s products are tailored to Chinese consumer’s needs and habits and complement Nestle’s existing product portfolio in China, which includes culinary products, soluble coffee, bottled water, milk powder and products for the food service industry.
Nestle has been in China for more than 20 years and operates 23 factories, two R&D centers and employs 14,000 people.
For more information about Nestle, visit www.nestle.com; for more information on Hsu Fu Chi, visit www.hsufuchifoods.com.