China Huiyuan Juice Group to pay US$18.9M for majority stake in some of Suntory Holdings assets that focus on China's coffee and tea beverage market
March 21, 2014
(China Business News)
– In an effort to strengthen foothold in China's coffee and tea beverage market, China Huiyuan Juice Group announced Thursday that it will shell out 117.66 million yuan (US$18.9 million) to acquire partial assets of Suntory (China) Holdings Co.
On Thursday, the two sides signed a Framework Agreement as per which Huiyuan will buy 50% stakes in Suntory (Shanghai) Foods Marketing Co and entirely acquire the Suntory (Shanghai) Foods Co, China's largest privately-held juice producer said in a filing.
Huiyuan will issue new shares amounting to 117.66 million yuan to the parent company of Suntory (China), Japan-based beverage firm Suntory Holdings, as part of the agreement.
For its part, Suntory will develop a strategic cooperation with Huiyuan in fields like supply management, quality control and product development, as well as support its Chinese partner to foray into other sectors.
Huiyuan, a Hong Kong-listed vegetable and fruit juice maker, has to expand its product portfolio and look for new profitable areas, as high prices of materials are pulling down the profit margin of its key business, medium-and high-concentration juice, the Global Times cited Ma Wenfeng, an industry analyst working with Beijing Orient Agribusiness Consultants, as saying.