CP Pokphand (CPP), a Chinese provider of animal nutrition solutions in the food industry, will acquire a 70.82% interest in CP Vietnam Livestock Corporation (CPVL), a leading integrated livestock and aquaculture company in Vietnam.
CPP will acquire the interest from the Bangkok, Thailand-based Charoen Pokphand Group (CPG), its majority shareholder, for about HK$4,735 million (US$609 million).
CPP is the investment arm in China of this same Charoen Pokphand Group, and is known in China as ‘Chia Tai’, CPP and its subsidiaries have been investing and working in China since the country first opened its doors to foreign investment in the late 1970s.
As one of the largest corporate acquisitions in Vietnam, the deal represents a unique opportunity for CPP to acquire a controlling stake in a market leader and expand into one of the fastest growing feed and farming markets in South East Asia. The acquisition enables CPP to broaden and diversify its business base.
Established in Vietnam in 1993, CPVL’s integrated livestock and aquaculture businesses span the entire food production value chain, from the manufacturing and distribution of animal feed, to breeding and farming of livestock and aquatic animals, as well as processing and production of meat and food products.
CPVL commands a leading position with approximately 20% of commercial feed market, 77% of industrial swine farming markets and 30% of broiler farming markets in Vietnam. For the year ended 2010, CPVL recorded an audited total revenue and net profit of VND20,077,880 million (US$1,046.5 million) and VND964,584 million (US$50.3 million), respectively.