Nestlé Acquires Majority Ownership of Chinese Candy Company

Nestlé NSRGY announced today that it intends to acquire 60% ownership of Hsu Fu Chi, a leading manufacturer and distributor of confectionery products in China, listed in Singapore SP. The deal will cost Nestlé about $1.7 billion.The move will allow the candy maker to solidify its position in China, which is one of the world's largest consumer markets. Though Nestlé has been present in China for over 20 years and currently employs 14,000 people, Hsu Fu Chi's products are tailored to Chinese consumers' needs and habits. The founding Hsu family will own the remaining 40%, and it appears that both sides were happy with the deal. Nestlé CEO Paul Bulcke noted: “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." Hsu Fu Chi's CEO and Chairman Hsu Chen: “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 is a Swiss Company engaged in the nutrition, health and wellness sectors. It holds a global market capitalization of over $200 billion. According to the statement, "The completion of the transaction is subject to regulatory approval in China and certain other conditions related to the scheme of arrangement."