September 4, 2013

China's Bright Food may acquire Israel's Tnuva

China's Bright Food (Group) Co is in discussion on the possible acquisition of Tnuva, Israel's biggest food manufacturer and distributor, in a deal that could be worth around US$1.6 billion.

"This has really just got going and the two sides are in the process of talking and understanding one another," Bright Food spokesman Pan Jianjun said.

British private equity firm Apax Partners APAX.UL holds a 56% stake in dairy-focused Tnuva, which markets milk and dairy products, eggs, fish, chicken and frozen vegetables.

Israeli investment company Mivtach Shamir (MISH.TA) owns another 20.7% of the company, while a group of kibbutzim - agricultural communities - hold 23.3%.

When Apax and Mivtach Shamir acquired control of Tnuva in 2008, the deal valued the company at US$989 million. The latest potential deal could be worth around RMB10 billion (US$1.63 billion), a Chinese paper said.

A spokeswoman for Apax in Tel Aviv said: "At the moment, we are not commenting."

Tnuva said in a statement Apax attracts approaches from time to time from companies seeking to buy a stake in the company, whose products account for more than 14% of shelf space in Israeli supermarkets, Apax estimates.

"Apax studies these approaches, those that are relevant, but as of now, none of them ... has led to negotiations," the statement said.

Bright Food has acquired several foreign firms over the last few years - including New Zealand's Synlait Milk Ltd (SML.NZ), Australia's Manassen Foods and France's Diva - in a bid to expand its global reach.

The Chinese firm also owns 60% of British cereal maker Weetabix Food, which it acquired for £1.2 billion (US$1.9 billion) in one of the biggest foreign purchases by a Chinese food group. Bright Food has said it expects international sales to account for 25% of revenue by 2015, up from 15%.