Food giant Nestlé has entered into a partnership agreement with Hsu Fu Chi, a leading manufacturer and distributor of confectionery products in China, it has been announced.
Under the terms of the proposed agreement, Vevey, Switzerland-based Nestlé will acquire 60 per cent of Hsu Fu Chi, while the Hsu family will own the remaining 40 per cent.
The total value of the transaction is approximately CHF 1.4 billion (approx. €1.2 billion).
Hsu Fu Chi’s portfolio includes sugar confectionery, cereal-based snacks, packaged cakes and sachima, a traditional Chinese snack. Nestlé’s existing product portfolio in China includes culinary products, soluble coffee, bottled water, milk powder and products for the food service industry.
Nestlé said that Hsu Fu Chi’s large portfolio of affordable products, with the potential for enhanced nutritional value, would fit perfectly into Nestlé’s global portfolio.
Hsu Fu Chi operates four large-scale factories in China and employs 16,000 people.
Commenting, Nestlé’s CEO Paul Bulcke said: “This proposed partnership will greatly reinforce our presence in China. It 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 centres in China.
“It also demonstrates our long-term commitment to China and enhances our ability to grow our portfolio of international and local brands in this dynamic market.”
Hsu Fu Chi’s CEO and chairman Hsu Chen added: “We are delighted to partner with Nestlé. Their offer is a recognition of the strength and quality of our company and a very attractive proposition for our shareholders. Together with Nestlé, 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.”
Nestlé has been present in China for over 20 years and today operates 23 factories, two R&D centres and employs 14,000 people in the country.
