| HONG KONG, Sept 12
HONG KONG, Sept 12 Associated British Foods
(ABF) said on Monday it has agreed to sell its cane
sugar business in southern China to a consortium led by
Shenzhen-listed Nanning Sugar Industry Co Ltd.
ABF did not disclose the value of the deal but two people
with direct knowledge of the matter said the transaction value,
including debt, was about $500 million.
One of the people said that two domestic private equity
funds, Minsheng Royal Capital Investment and Guangxi Royal
Construction Investment had teamed up with Nanning to buy the
The people declined to be identified as details of the deal
were not made public by the companies. ABF declined to comment
while Nanning was not available for immediate comment.
Shares in Nanning, which has a market value of $1.1 billion,
were suspended from trade on Monday afternoon.
ABF's southern China business comprises five cane sugar
factories with an annual production capacity of some 600,000
tonnes of sugar, which are held through controlling interests in
four joint ventures.
The sale also attracted bids from some Chinese state-owned
enterprises, one person said.
Following the sale, AB Sugar will have operations in
Britain, Spain, southern Africa and northern China with an
annual processing capacity of some 4.4 million tonnes of sugar
and 600 million litres of ethanol. ABF will have about 4,500
staff in China.
While sugar prices have risen sharply this year, a long
downturn in prices prior to that has forced many global
producers, including ABF, to focus on profitable markets.
ABF entered the Chinese sugar market in 1995 with the
acquisition of its first cane sugar factory through its Bo Qing
joint venture in Guangxi province.
($1 = 0.7537 pounds)
(Reporting by Denny Thomas; Additional reporting by Tris Pan;
Editing by Edwina Gibbs)