September 22/Xiamen, China/China Briefing -- Nestlé’s bid for a controlling stake in the China-based food company Yinlu has received the Chinese government’s approval after an anti-monopoly review that lasted several months. Nestlé hopes the new deal will help diversify its product line in China and increase the food giant’s presence in the world’s most important growth market.

Nestlé first announced the signing of a partnership agreement taking a 60% stake in Yinlu back in April. Yinlu, a Xiamen-based private food company, is well known for its ready-to-drink peanut milk and ready-to-eat canned rice porridge.

The acquisition price of the controlling right in Yinlu was not revealed by Nestlé, but the Financial Times estimates the stake value may range between $600 million and $1 billion.

While China has used its anti-monopoly law established three years ago to shoot down quite a few foreign companies’ bids to acquire or merge with Chinese companies, it was fortunate that Nestlé passed the anti-monopoly review and pulled the deal off. Shen Danyang, spokesman of the Chinese ministry of commerce (MoC), said the MoC found the takeover will not reduce competition after its assessment of any potential impact on China’s food and beverage industry.

As a well-recognized brand name in China, Yinlu recorded its 2010 sales of $830 million. Before the takeover, the company was already the entrusted local processor of Nescafé -- Nestlé’s instant coffee products.

From the September 22, 2011, Prepared Foods' Daily News.