SAIF Said to Aim to Buy $260 Million Stake in China's Huiyuan From Danone
SAIF Partners Ltd., a venture capital fund focused on China and India, plans to buy Groupe Danone SA’s stake in China’s biggest pure-juice maker for about $260 million, three people with direct knowledge of the matter said.
The Hong Kong-based fund, which manages $4 billion, is seeking to buy Danone’s entire 22.98 percent stake in China Huiyuan Juice Group Ltd., the people said, asking not to be identified before an announcement later today. SAIF is offering about HK$6 apiece, 11 percent more than today’s closing price of HK$5.42, one of the people said.
Danone in September 2009 sold its stake in Chinese food and beverage maker Hangzhou Wahaha Group Co., ending two years of lawsuits with its partner. The Paris-based company, which has operated in China since 1987, has since vowed to avoid joint ventures in the country and to build operations on its own.
Michael Chu, a spokesman for Danone in China, declined to comment. Officials at SAIF, which also has investments in technology and financial services companies, declined to comment.
The investment would be SAIF’s biggest in China, two of the people said. Beijing-based Huiyuan is competing for beverage sales as Coca-Cola Co., PepsiCo Inc. and other overseas drink makers boost spending in China to expand beyond soft drinks.
Shares of Huiyuan have fallen 35 percent since the Ministry of Commerce rejected Coca-Cola’s $2.3 billion takeover bid in March 2009, saying the deal would have hurt competition in the nation’s drinks market. Coca-Cola offered to pay HK$12.20 per Huiyuan share.
The sale of Danone’s 51 percent stake in ventures with Wahaha ended an almost 12-year partnership that collapsed in 2007 amid more than 30 lawsuits and accusations that Wahaha Chairman Zong Qinghou unlawfully sold Wahaha-branded juice and tea outside their partnership.
Danone gets more than 40 percent of its sales from emerging markets, a higher proportion than bigger rival Switzerland’s Nestle SA.