August 19, 2022

Nestlé in Acquisition Talks With China’s Biggest Confectioner

SHANGHAI — Nestlé, the world’s biggest food maker, is one of several companies in talks to acquire or form a partnership with the biggest Chinese confectioner, Hsu Fu Chi International.

A spokeswoman for Hsu Fu Chi said Monday that the company has been in talks with companies in the United States, Europe and Japan to form a partnership that would help expand its business in China but that no deal has been reached.

“We don’t deny we’re discussing this with Nestlé, because there’s already rumors. But we don’t want to reveal the names of the other companies,” said Christine Sun, the Hsu Fu Chi spokeswoman. “For now, we don’t have a concrete agreement with anyone. It’s too early to discuss the form of cooperation.”

Shares of Hsu Fu Chi, which are listed in Singapore, were suspended in trading
early Monday.

He Tong, a spokeswoman for Nestlé, which is based in Switzerland, declined to comment on Monday.

If Nestlé or another big company acquires all of Hsu Fu Chi, it would be one of the largest deals ever by a foreign company in China and would likely need regulatory approval from the Chinese authorities since the company’s operations are almost entirely in China.

Two years ago, regulators blocked Coca Cola’s $2.4 billion bid to acquire the Chinese juice maker Huiyuan, saying the deal would impede competition in the beverage market.

Bloomberg News first reported over the weekend that Nestlé was in talks to buy Hsu Fu Chi, which has a market capitalization of $2.6 billion.

But Ms. Sun suggested Monday that Hsu Fu Chi was looking for a partner rather than seeking to sell the entire company.

“Hsu Fu Chi has been seeking a partnership that can help strengthen the company’s brand for a while,” she said. “Since 2007, we have been negotiating with companies from Japan, the U.S. and Europe about potential partnerships.”

In her comments, though, Ms. Sun did not rule out a sale.

Hsu Fu Chi was founded by four brothers from Taiwan and has been operating from southern China since the early 1990s. The company makes chocolates, candy and pastries.

Xu Yan contributed research.

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