Under the proposed agreement, Nestlé intends to acquire 60% of Hsu Fu Chi while the Hsu family will own the remaining 40%. Hsu Fu Chi’s current CEO and chairman, Hsu Chen, will continue to lead the company in the new partnership.
Consequently, Nestlé proposes to acquire the shares of Hsu Fu Chi’s independent shareholders, representing 43.5% of the shares in Hsu Fu Chi, by way of a scheme of arrangement. Nestlé offers a cash price of SGD 4.35 per Hsu Fu Chi share which represents a premium of 24.7% over the volume-weighted average share price over the last 180 days. If the scheme is approved by the independent shareholders, Nestlé will acquire in addition a 16.5% stake in Hsu Fu Chi from the Hsu family’s current holding of 56.5%.
Nestlé has secured irrevocable undertakings from the two largest independent shareholders – Arisaig Partners Holdings and subsidiaries of the Baring Asia Private Equity Fund which hold 9.0% and 16.5% respectively – to vote in favour of the scheme. The total price to be paid by Nestlé to acquire 60% of Hsu Fu Chi is approximately SGD 2.1bn (CHF 1.4bn).
The completion of the transaction is subject to regulatory approval in China and certain other conditions related to the scheme of arrangement.
“This proposed partnership will greatly reinforce our presence in China,” said Nestlé CEO, Paul Bulcke. “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. It also demonstrates our long-term commitment to China and enhances our ability to grow our portfolio of international and local brands in this dynamic market.”
Source: Nestlé
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