Chinese dairy giant Bright Food looks set continue its international expansion after agreeing to acquire a controlling stake in Israel’s largest dairy, Tnuva Foods.
State-owned Bright Food, one of China’s largest dairy product manufacturers, announced late last week that it had agreed to acquire a 56% stake in Tnuva from British private equity firm Apax Partners.
The value of the transaction, which is subject to relevant regulatory approval, was not disclosed by Bright Food or Apax.
But according to reports, citing sources close to the deal, Bright will pay in the region of US$960m (3.34bn Israeli Shekels, €700m) for the stake.
Tnuva manufactures, distributes and markets a wide range of dairy products, including yogurt, cheese, and plain and flavoured milk, under its Tnuva Valley, Yoplait, and Piraeus brands.
It's product portfolio also includes eggs, frozen vegetables, fresh and frozen meat, and pastries. Among these products are seven of the ten best known brands in Israel, according to seller Apax.
Commenting on the deal, Shanghai-based Bright said that cooperation between itself and Tnuva will "deliver an international platform for Tnuva's future development.
“We are proud to purchase Tnuva," said a statement issued by Bright, "we see the investment in Tnuva as a long-term investment that will make Tnuva a global company.”
The company has also, however, vowed to "maintain Tnuva as an Israeli company and will continue to partner with all its stakeholders...to best serve the Israel consumer."
Apax Partners purchased its majority stake in based Tnuva in 2008. Since then, it has ploughed more than 1.4bn Israeli Shekels (US$400m, €300m) into the firm to finance modernization and innovation efforts.
Commenting on the proposed sale of its stake in Tnuva, Zehavit Cohen, managing partner, Apax Partner, said:“This is a great outcome for our partners and Tnuva’s management, employees and other stakeholders. In recent years we worked prudently, together with management and employees, to transform Tnuva to a stronger company with excellent long-term prospects."
Mivtach to sell up?
Following last week's announcement, reports have emerged that Israeli investment group Mivtach Shamir Holdings, which continues to hold a 20.665% stake in Tnuva, is now in talks with Bright Food.
Mivtach has reportedly been given two months to decide whether to remain a shareholder or sell up.
DairyReporter.com approached Mivtach to confirm the reports, but no response was forthcoming prior to publication.