October 13/Guangzhou, China/SBWIRE -- Nestle (China) Ltd. formally signed an acquisition agreement with Yinlu Food Group Co. Ltd. on September 8, 2011. According to the agreement, Nestle will buy 60% shares of Yinlu. Meanwhile, Nestle and Yinlu will respectively invest $240 million and $160 million in constructing new plants. The acquisition will be completed in November 2011.

Both Nestle and Yinlu believe that the acquisition will help them exploit more shares in domestic and overseas food markets. Nestle is attracted to the acquisition of Yinlu because of Yinlu's good brand effect in protein beverages. The acquisition can not only help Nestle exploit domestic markets for protein beverage and eight-treasure congee but also strengthen its brand influence in China.

On the other hand, the acquisition also can help Yinlu expand its market share in a short term. According to the acquisition agreement, Yinlu will continue using its current brand, and it will exploit food markets in the central and western regions of China through Nestlé’s existing production bases and the new plants of Yinlu and Nestle in these regions.