Brenntag expands food and nutrition business in China with Zhongbai acquisition
29 Jan 2021 --- German chemical and ingredients distribution company Brenntag has acquired the majority of Zhongbai Xingye Food Technology (Beijing), starting with a 67 percent stake valued at an Enterprise value of about €90 million (US$109 million).
The Chinese company is dedicated to the distribution of a wide variety of specialty food ingredients, including dairy products and proteins.
Christian Kohlpaintner, CEO of the Brenntag Group, highlights the significance of the acquisition for Brenntag’s business strategy.
“The chemical distribution market in Asia Pacific, and especially in China, is growing dynamically,” he says. “We see a substantial potential there, and we will strengthen the focus on the region in terms of our M&A strategy. Thus, Zhongbai Xingye is perfectly in line with Brenntag’s ambitions, not only geographically, but also in terms of industry segment and deal size.”
“The acquisition of the leading player in mainland China is an important step for our company to become a full-line distributor of food ingredients in the Asian market.”
Zhongbai Xingye is dedicated to the distribution of a wide variety of specialty food ingredients, including dairy products.The 100 percent acquisition of the entire share capital of Zhongbai Xingye will be executed in two steps. The first tranche comprises a majority stake of 67 percent. The remaining 33 percent will be acquired by Brenntag by the end of 2024.
“Headquartered in the capital of China, the company offers Brenntag the platform to extend our business of specialty food ingredients in the country,” says Henri Nejade, member of the management board of the Brenntag Group and COO of Brenntag Specialties.
He further mentions the business’ strong historical track record: “Zhongbai Xingye results show strong growth rates over the years.”
The business will be settled within the global division of Brenntag Specialties.
The acquired business generated sales of approximately €146 million (US$177 million) over a twelve-month period up to June 2020.
Closing of the first tranche is subject to certain contractual conditions and regulatory approvals and is expected to be completed in the first half of 2021. The closing of the second tranche is expected at the end of 2024.
Edited by Gaynor Selby
