Deyu Agriculture Corp. Acquires Taizihu Group

As a result of the acquisition, Deyu has integrated its sales network of over 16,000 retail stores with the Taizihu Group's sales channels, which consist of 100 distributors in more than 10 provinces in China and export channels in Europe, USA, Japan and other countries.

Feb 13 2012 --- Deyu Agriculture Corp., a Beijing, China-based vertically integrated producer and distributor of organic and non-organic corn and grain products, announced that it has acquired 100% of the issued and outstanding share capital of Shanxi Taizihu Food Co., Ltd. and its subsidiary, Shanxi Huichun Bean Products Co., Ltd. (together, the "Taizihu Group") for approximately $5,500,000 in cash. The Taizihu Group, which is located in Shanxi Province in China, is in the business of producing and selling fruit beverages under the brand name "LongQuan Villa" and soybean products under the brand name "Huichun" throughout China.

"The acquisition of the Taizihu Group will enable us to better provide products to the thriving global market for deep processed health food and drinks," remarked Jianming Hao, the Chief Executive Officer and Chairman of Deyu. "The Taizihu Group has a well-developed product line consisting of over 100 types of foods and beverages, such as grain drinks, soybean products, and fruit vinegars and juices. In particular, its LongQuan Villa brand of fruit beverages and its Huichun brand of soybean products are well-recognized names among consumers in China. By leveraging the Taizihu Group's product lines, we are looking to capture a more substantial share of the emerging worldwide market for deep processed health food and drinks while minimizing our risks in developing and introducing new products, establishing brands, cultivating markets and making products profitable."

As a result of the acquisition, Deyu has integrated its sales network of over 16,000 retail stores with the Taizihu Group's sales channels, which consist of 100 distributors in more than 10 provinces in China and export channels in Europe, USA, Japan and other countries. Accordingly, Deyu is confident that the acquisition of the Taizihu Group will help drive Deyu's regional and global sales of its deep processed foods and drinks and packaged and unpackaged simple processed grain products.

Mr. Hao added, "In acquiring the Taizihu Group, which has products yielding high profit margins, advanced technologies, a management team with ample experience in the deep-processed food industry and a large manufacturing base of over a million square feet close to a key transport hub in Shanxi Province, we believe that we will be in a much better position to continue to grow our business and increase returns for our investors. All of us at Deyu are very excited about this acquisition as we believe that it presents us with a tremendous opportunity to expand our operations considerably."