Beijing Sanyuan Foods Co Ltd, one of China’s leading dairy producers, plans to purchase amajority ownership in Crowley Properties Ltd, a Vancouver-based company making dairyproducts such as yogurt, cheese, ice cream and butter for about C$19 million ($14.58 million),according to an announcement by Sanyuan.
The acquisition was approved by Sanyuan’s board of directors in May and is now underassessment by related government departments.
Beijing-based Sanyuan will make the deal by establishing a joint venture with Canada’s ProtoCapital Investment & Trade Group Ltd. With the joint venture being the buyer, Sanyuan willhold 51 percent stake in it, with Proto holding the remaining shares.
«Crowley is a company with a history of more than a century and also with a good reputationamong consumers such as Sanyuan,» said Chang Yi, chairman of Sanyuan.
He said Sanyuan had been seeking out merger and acquisition opportunities abroad for yearsand is grasping the opportunity created by the fact that the family that owns Crowley has nomembers who plan to continue the business. «We aim to explore overseas markets andproduce high-end dairy products after the acquisition.»
According to Chang, Crowley’s assets also attracted other bidders, but «the odds are in ourfavor because Sanyuan has a great advantage».
Chinese dairy companies’ acquisitions abroad started in 2010 when Bright Dairy and Food CoLtd, another major Chinese dairy producer, bought a 51 percent stake of New Zealand’sSynlait Milk. Since then, domestic dairy companies have tried one after another to purchaseoverseas capabilities.
«They go out to learn advanced technology and management experience so that theirproducts can be more competitive in the domestic market,» Song Liang, a senior researcher inthe dairy industry, was quoted by the Securities Daily.
China’s domestic dairy sector was badly hurt by the 2008 scandal in which several majorcompanies were found to be adding melamine to their products.
Since then, Chinese consumers have kept increasing their use of imported dairy productsbecause they are worried about quality issues in domestic milk production.
The acquisition was approved by Sanyuan’s board of directors in May and is now underassessment by related government departments.
Beijing-based Sanyuan will make the deal by establishing a joint venture with Canada’s ProtoCapital Investment & Trade Group Ltd. With the joint venture being the buyer, Sanyuan willhold 51 percent stake in it, with Proto holding the remaining shares.
«Crowley is a company with a history of more than a century and also with a good reputationamong consumers such as Sanyuan,» said Chang Yi, chairman of Sanyuan.
He said Sanyuan had been seeking out merger and acquisition opportunities abroad for yearsand is grasping the opportunity created by the fact that the family that owns Crowley has nomembers who plan to continue the business. «We aim to explore overseas markets andproduce high-end dairy products after the acquisition.»
According to Chang, Crowley’s assets also attracted other bidders, but «the odds are in ourfavor because Sanyuan has a great advantage».
Chinese dairy companies’ acquisitions abroad started in 2010 when Bright Dairy and Food CoLtd, another major Chinese dairy producer, bought a 51 percent stake of New Zealand’sSynlait Milk. Since then, domestic dairy companies have tried one after another to purchaseoverseas capabilities.
«They go out to learn advanced technology and management experience so that theirproducts can be more competitive in the domestic market,» Song Liang, a senior researcher inthe dairy industry, was quoted by the Securities Daily.
China’s domestic dairy sector was badly hurt by the 2008 scandal in which several majorcompanies were found to be adding melamine to their products.
Since then, Chinese consumers have kept increasing their use of imported dairy productsbecause they are worried about quality issues in domestic milk production.
