Huiyuan Juice buys founder's assets
Chief's stake rises to 68.3pc with HK$4.9b deal aimed at boosting investor confidence
China Huiyuan Juice Group plans to acquire fruit planting and juice-concentrate-making businesses from its founder and chairman, Zhu Xinli, as it seeks to bolster investor confidence.
The company said after the market close yesterday the transaction, valued at HK$4.9 billion, would help enhance its profitability while creating a vertically integrated business model for the Huiyuan brand.
The firm now deals with only downstream businesses including bottling and sales of Huiyuan-branded products.
The acquisition of the upstream assets from Zhu could shore up Huiyuan's earnings and enhance the transparency of its business operations, the company said.
Nearly all raw juice needed by Huiyuan is now supplied by Zhu's own businesses, with the amount reaching 1.25 billion yuan (HK$1.5 billion) last year.
Huiyuan is the mainland's largest juice brand in terms of sales.
Zhu said the decision to merge with the upstream assets reflected confidence in the mainland's juice market as consumers became increasingly aware of food safety.