In advance of the $23 billion buyout this month of H.J. Heinz Company, the famous ketchup and condiments producer is selling of its China packaged food business, Shanghai Long Fong Company.
The buyer is Zhengzhou Sanquan Foods Company whose stock rose on the Shenzhen stock exchange to its highest point in eleven months as a response to the announcement of the purchase. The company, which sells frozen snacks and meals on the Chinese mainland, hopes to enlarge market share and increase its competitive edge as a result of the purchase of Long Fong. The companyannounced that it will be using internal financing and has not released the value of the deal.
Heinz stated that the sale is consistent with its “global strategy to de- emphasize non-core frozen food businesses outside the U.S.”
The Pittsburgh-based company added that the move is not connected with its sale to Berkshire Hathaway Inc. and 3G Capital Inc. for approximately $23 billion.
“The decision to seek a buyer for our Long Fong frozen foods business in China is unrelated to the merger agreement with Berkshire Hathaway and 3G Capital,” a spokesperson for Heinz stated.