Companies

Bright Dairy denies yogurt bid talk

(China Daily)
Updated: 2011-02-11 09:45

BEIJING - Bright Dairy & Food Co, China's third-biggest dairy company by sales, denied that it is bidding for a stake in a French yogurt maker.

Gong Yanqi, a spokeswoman for the Shanghai-listed company, told China Daily that Bright Dairy & Food is not discussing a bid for a 50 percent stake in Yoplait. Bright Dairy is a listed arm of the Bright Food Group.

A customer drinks a cup of Bright Dairy & Food Co's dairy drink at a supermarket. The company denied on Thursday that it is bidding for a stake in the French yogurt maker Yoplait. [Photo/China Daily]

On Thursday, Bloomberg quoted Bright Food Group spokesman Chen Chunshan as saying that Bright Dairy & Food is participating in the bidding, but Gong said the report was incorrect.

According to Bloomberg, Yoplait shareholders PAI Partners and Sodiaal said on Wednesday that they had received "indicative" offers from nine companies for PAI's 50 percent stake and will announce a shortlist of bidders in the coming days.

Bloomberg's report claimed that Bright Dairy & Food was among the companies that made an offer and its bid valued Yoplait at 1.7 billion euros ($2.3 billion).

Other bidders were said to include the US food company General Mills, the multi-national dairy products corporation Lactalis, the cheese producer Bel of France, and Switzerland's Nestl.

Bright Food Group's Chairman Wang Zongnan said last month that the company would continue to seek domestic and international acquisitions in the dairy, sugar and liquor industries to gain global dominance, after it failed to acquire the US-based vitamin and supplement retail chain GNC Holdings Inc.

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Bright Food Group has been active in overseas mergers and acquisitions (M&A) activity since the beginning of 2010. The group paid $58 million for a 51 percent stake in New Zealand's Synlait Milk Ltd, its first overseas investment. Later it was unsuccessful in an attempt to buy the sugar unit of Australia's CSR Ltd in July.

In December, the group teamed up with the private equity company Blackstone to acquire GNC but again failed due to differences on price.

Dong Guangyang, a food and beverage industry analyst at China Merchants Securities, said if Bright Dairy & Food can succeed in winning the stake in Yoplait, the listed company's financial performance can be improved.

Dong said overseas M&A activity in the dairy industry is not common in China because of a number of inherent risks. "Government policy and cultural differences should always be valued by Bright Dairy & Food and their group," said Dong.

A food and beverage analyst at Xiangcai Securities, who declined to be named citing company policy, said the company should improve its domestic market share before expanding its overseas market.

"Bright Dairy & Food has greatly lagged behind China's two largest dairy companies," the analyst said, "If they can't perform well in a familiar market, how can they compete abroad?"