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China clears Nestle $1.7bn bid for confectionery maker | |
(about 9 hours later) | |
Chinese antitrust regulators have approved Nestle's $1.7bn (£1.1bn) offer for sweets and snack maker Hsu Fu Chi International. | Chinese antitrust regulators have approved Nestle's $1.7bn (£1.1bn) offer for sweets and snack maker Hsu Fu Chi International. |
Swiss food company Nestle made the offer for a 60% stake in the Singapore-listed Hsu Fu Chi in July. | Swiss food company Nestle made the offer for a 60% stake in the Singapore-listed Hsu Fu Chi in July. |
The approval comes a month after the ministry of commerce cleared Yum Brand's takeover of Little Sheep Group. | The approval comes a month after the ministry of commerce cleared Yum Brand's takeover of Little Sheep Group. |
Analysts said the approval is further evidence that China could be opening up to foreign buyers. | Analysts said the approval is further evidence that China could be opening up to foreign buyers. |
In 2009, Coca-Cola's $2.4bn bid for China's Huiyuan Juice Group was rejected by the government because of concerns over competition. | In 2009, Coca-Cola's $2.4bn bid for China's Huiyuan Juice Group was rejected by the government because of concerns over competition. |
"There had been a concern that if you were doing a transaction that involved a popular Chinese brand it would be difficult to get that through," said Frank Schonevald from McDermott, Will and Emery law firm in Shanghai. | "There had been a concern that if you were doing a transaction that involved a popular Chinese brand it would be difficult to get that through," said Frank Schonevald from McDermott, Will and Emery law firm in Shanghai. |
"This deal, together with the earlier Yum Brands-Little Sheep transaction, shows that's not the case." | "This deal, together with the earlier Yum Brands-Little Sheep transaction, shows that's not the case." |
China ambitions | China ambitions |
The Nestle deal is one of the biggest by a foreign company in China. | The Nestle deal is one of the biggest by a foreign company in China. |
Dongguan-based Hsu Fu Chi makes sugar sweets, snacks and cakes. Under the agreement Nestle will pay 4.35 Singapore dollars per share, an 8.7% premium on the 1 July closing price. | Dongguan-based Hsu Fu Chi makes sugar sweets, snacks and cakes. Under the agreement Nestle will pay 4.35 Singapore dollars per share, an 8.7% premium on the 1 July closing price. |
Trading of Hsu Fu Chi's shares was halted when the offer from Nestle was announced. | Trading of Hsu Fu Chi's shares was halted when the offer from Nestle was announced. |
Nestle already has a major presence in China. Earlier this year, it acquired a 60% stake in food maker Yinlu Food Group. | Nestle already has a major presence in China. Earlier this year, it acquired a 60% stake in food maker Yinlu Food Group. |
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