Chinese buyers still have an appetite for deals when it comes to French spreads, despite increasing scrutiny from Bejing.
Fosun International Ltd (復星國際) and Beijing Sanyuan Foods Co (北京三元食品) are close to a joint deal to buy French margarine maker St Hubert from Montagu Private Equity, people familiar with the matter said.
The agreement for the brand, which Montagu has owned since 2012, could come as soon as this week, the people said, asking not to be identified because the plans are private.
The business could fetch a price, including debt, of about 600 million euros (US$702 million), one of the people said.
As China stepped up its scrutiny of capital outflows this year to protect its currency, Fosun was among a group of prolific acquirers — the others being HNA Group Co (海航集團), Dalian Wanda Group Co (萬達集團), Anbang Insurance Group Co (安邦保險集團) and the buyer of the AC Milan soccer club — whose loans have been probed by the nation’s banking regulator.
Beijing Sanyuan, a major Chinese dairy producer, is controlled by the state and counts Fosun as its second-largest shareholder.
Trading in shares of Sanyuan, a major dairy producer in China, have been suspended since July 17 pending a major acquisition, according to a regulatory filing.
No final decisions have been made and the deal might still fall through, the people said.
Brands selling milk products and alternatives are changing hands as growth of margarine and other spreads slows and consumers seek to cut down on dairy items.
Consumer brands giant Unilever PLC has said a sale process for its spreads business will take place in the autumn and the company will seek a binding agreement for the unit by the end of the year.
Meanwhile, China Eastern Airlines Corp (中國東方航空) yesterday said that it is to acquire a 10 percent stake in Air France-KLM Group as it moves to expand its network in Europe.
The state-owned company is to pay about 375 million euros for its share in the French-Dutch airline, it said in a filing to the Hong Kong stock exchange.
US carrier Delta Air Lines Inc is to acquire a 10 percent stake in Air France-KLM, the statement said.
The “three companies will build a global network of airlines and will provide more convenient, efficient and high-quality travel services for passengers around the world”, the statement said, adding that the deal will also allow China Eastern “to extend and expand its route network,” develop new markets and improve its brand image.
The deal will “give Air France-KLM a European leadership position on Shanghai, the main business market in China,” the European carrier said.
Additional reporting by AFP
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