Nestle, Bright Food Cross-Border M&A Look Sweet 雀巢、光明食品跨境并购前景看好

By newsdoug on July 5, 2011

While the rest of the world fixates on the latest twists and turns in the Guo Meimei-Red Cross scandal, I thought I’d turn my attention to a couple of cross-border M&A deals in the low-profile but lucrative food sector, one involving global giant Nestle (Zurich: NESN) and the other China’s Bright Food. The Nestle deal has the Swiss giant in talks to purchase Hsu Fu Chi (Singapore: HSFU), a Singapore-listed Chinese candy maker with a market capitalization of $2.6 billion. (English article) The other deal has Bright, which has been on the acquisition trail for a while (previous post) considering an offer for Australia’s Treasury Wine (Sydney: TWE). From a general perspective, I like cross-border food deals as they’re usually straightforward because they involve simple products most often confined to a single market. In the case of multinationals like Nestle Bright raises the glass in Australia buying into China, such deals are also probably welcome by the Chinese government, since having a name like Nestle behind a product offers guarantees of quality control in a market plagued by a continuous stream of scandals over tainted food. For Chinese companies like Bright looking to expand globally, such deals are relatively easy to execute and operate as they usually involve healthy companies and disruption to operations are minimal. My one concern in Bright’s case is that, in its clear enthusiasm to buy an overseas company after several failed efforts, it could end up overpaying when it finally completes a purchase and then, in its eagerness to show investors it made the right decision, implement management and other changes that create unexpected problems. But at least for now, both of these deals, if they happen, look like positive steps for all companies involved, and we could see other multinationals like Kraft (NYSE: KFT) follow on the inbound M&A trail, and Chinese names like Tsingtao Beer (Shanghai: 600600) follow on the outbound trail in the next 1-2 years.

Bottom line: Potential cross-border M&A by Nestle and Bright Food look like smart deals in the straightforward consumer foods sector, augering more such deals in the next 1-2 years.

当大家都在关注郭美美和红十字会丑闻时，我更想关注低调但利润丰厚的食品行业的几宗跨国并购案，其中一宗与全球食品巨头雀巢<NESN.VX>有关，另一宗与中国的光明食品集团有关。雀巢正洽购新加坡上市的中国糖果制造商徐福记<HSFU.SI>，後者市值为26亿美元。光明考虑收购澳大利亚葡萄酒公司Treasury Wine<TWE.AX>。整体而言，我看好跨国食品公司并购，由於产品线简单，市场单一，因此并购往往直截了当。在食品跨国并购案中，例如雀巢入境收购中国食品商，此类交易也可能受到中国政府欢迎，因为拥有“雀巢”品牌名称，相当於提供了质量管理保证，而中国食品市场安全问题频发。而对於希望拓展海外市场的光明等中国企业，此类交易通常有品牌形象良好的企业参与，因此并购相对容易进行和操作，运营中断的可能也较小。我对光明并购澳洲葡萄酒商的担忧是，光明此前几宗海外并购失败後，其明显的并购热情可能导致其出价过高，随後，由於光明急切希望向投资者证明其决策正确，在进行管理和其它调整时或造成意想不到的问题。但至少目前看来，如果上述两宗并购得以实现，对所有相关公司都是积极举措，预计未来一两年，卡夫食品<KFT.N>等国际品牌将在中国展开并购，而青岛啤酒<600600.SS>等中国食品商也将出境并购。

一句话：雀巢和光明食品可能进行跨国并购，应该是消费者食品公司的明智之举，预计未来一两年将有更多类似并购交易。