The family behind Chinese snack and candy maker Hsu Fu Chi International is planning to reduce its stake in the company and enter into a joint venture with food giant Nestlé, as part of the family’s strategy to develop the group’s brand.
In a statement issued by Nestlé on 11 July, the group said it plans to acquire 60% of Hsu Fu Chi, while the Hsu family will own the remaining 40%. Nestlé will pay around €1.5 billion for the acquisition.
The founding family, which comprises four Taiwanese brothers, currently owns 56.5% of Hsu Fu Chi, while the rest is held by independent shareholders, including a listing on the Singapore stock exchange. When contacted, a spokeswoman for the company refused to comment on the deal.
According to Nestlé, current chairman and chief executive of Hsu Fu Chi, Hsu Chen, will remain in his position, while his brothers will be board members. The group will also stop trading on the Singapore stock exchange after the deal is finalised.
The reduction in family control comes as the Hsu brothers look to expand and grow their company. Second-oldest among the brothers, Chen said in the statement: “Together with Nestlé, we will accelerate the development of the Hsu Fu Chi brand, its production and distribution capabilities and ensure its continued growth momentum and brand legacy for the future.”
Dongguan, Guangdong-based Hsu Fu Chi was founded in 1992 by the Hsu brothers. The company makes sweets, cakes and cereal bars in China, and had estimated sales of €471 million in 2010, a 14% rise on 2009.
Forbes ranked Chen the 25th richest man in Taiwan in 2010 with an estimated wealth of $1.41 billion.