September 15, 2020
CP Foods supports subsidiary's acquisition of swine businesses in China
The board of directors of Charoen Pokphand Foods PCL (CP Foods) has agreed on September 11 to propose for shareholders' approval of its subsidiary in China to acquire 43 companies in swine businesses.
The acquisition will be conducted through the issuing of new shares as payment to seller.
The proposal will facilitate the integration of Chia Tai Investment Co., Ltd's (CTI) feed production in China with the swine businesses which are managed by Chia Tai Animal Husbandry Investment (Beijing) Co., Ltd., a subsidiary of Charoen Pokphand Group. CTI is a subsidiary of CP Foods via CP Pokphand Co., Ltd (CPP) and is mainly focused on feed manufacturing and distribution in China.
The proposed deal will involve the acquisition of 43 companies under Chia Tai Animal Husbandry Investment for ¥28.14 billion (US$4.109 billion). CTI will issue new shares as payment to the company.
"Entering into this business will create opportunities for CTI by penetrating (further into the swine market) with a high growth potential like China. It is also a vertical integration of CTI to achieve an integrated swine business," CP Foods explained in its press release. "This strategy will (drive) the company's efficiency to (adapt with) market changes as well as to combine expertise in its value chain -- which is the (goal) of the business integration -- and (further) facilitate business expansion.
- CP Foods