China Bright Food, Liangyou Strike Deal to Create Grain and Oil Giant
China’s state-owned Bright Food Group Co. Ltd and Shanghai Laingyou Group announced a merging of the two companies that will create one of China’s largest grain and oil conglomerates, although likely smaller than centrally managed, COFCO.
In recent years Bright Food has been seeking global acquisitions, buying the UK’s Weetabix, and Australia’s Mundella Foods among others.
Both companies are operated by Shanghai’s State-owned Assets Supervision and Administration Commission, and both are major players in China’s grain sector. Bright Food sold 1.6 million tons of grain products last year with sales reaching 120 billion yuan (US$19.33 billion), and Liangyou which specializes in grain and oil storage, sold between eight and ten million tons per year with sales of 10 billion yuan (US$1.61 billion). In addition, both companies are also Chinese retail giants, and upon completion of the deal, the conglomerate will control more than half of Shanghai’s 4,000 convenience stores.
Discussions are incomplete on the topic of whether to merge Bright Food listed units. Shares in Bright Dairy & Food Co. remain suspended, but shares in three of its listed companies, Shanghai Maling Aquarius Co., Shanghai Jinfeng Wine Co., and Shanghai Haibo Co. all climbed more than four percent upon news of the merge.