Union of four state-owned firms will result in a company with 46b yuan in assets and 28b yuan in annual sales
Bright Dairy & Food, China's third-largest dairy products maker, will merge with three other major state-owned food companies amid intensifying competition and falling profits.
The merger with Shanghai Sugar Cigarette & Wine (Group), Jinjiang Food and Shanghai Gong Nong Shang Group, all listed on the Shanghai stock market, will form a firm that has nearly 46 billion yuan in assets and annual sales of 28 billion yuan.
The new company, Bright Foods Group, would include the most famous brands of the Shanghai food industry in tinned meat, liquor, soft drinks, biscuits and dairy products, the companies said in a joint statement yesterday.
The merger was in line with an instruction from higher departments and with the demands of reforming state companies, the statement said. It did not give more details.
The new firm would have upstream and downstream capabilities from production and processing to distribution and retail, said Shanghai Securities analyst Chen Gang.
Last year, the companies reported combined sales of 28.3 billion yuan, net profits of 470 million and had assets of 45.8 billion yuan.