A Chinese Company Ready to Acquire 51% Stake in Fauji Foods

Chinese Company Acquire 51% Stakes in Fauji Foods

A Chinese company Inner Mongolia Yili Industrial Group Co has expressed an intention to acquire 51% stake in Fauji Foods.

Fauji Foods Limited confirmed this news by filing a notification on the Pakistan Stock Exchange (PSX). Inner Mongolia Yili Industrial Group is negotiating with Fauji Fertilizer Bin Qasim Limited, with an intention to acquire up to 51% of the shares in Fauji Foods Limited.

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The manager appointed to the offer by the Chinese company is CitiBank

Samiullah Tariq Head of Research, Arif Habib Limited said, “I think with the arrival of a Chinese player in the food sector, not only new investment will take place in the dairy sector but new technology and experience will benefit the sector overall.”

Tariq also commented on FBL’s investment in Fauji Foods and said, “FFBL, on the other hand, has not done well with this investment in financial terms aside from penetration of its brands in the market. FFBL can obviously liquidate this investment and either retire its borrowing or invest in some other sector.”

Separately, a notification was also filed on Shanghai Stock Exchange and Inner Mongolia Yili Industrial Group expressed its intention to acquire 51% stake in Fauji Foods.

The Chinese company Inner Mongolia Yili Industrial Group Co., Ltd produces and sells dairy products in China and globally. The dairy products include milk powder, liquid milk, ice cream, soybean milk powder, milk tea powder, yogurt and milk tablets.

Similarly, Fauji Foods produces and sells milk, dairy products, flavored milk, butter, cheese, pasteurized milk, UHT milk, fruit juices, and food products in Pakistan.

The acquisition of Fauji Foods by a Chinese company can be mutually beneficial.