F&N buys three F&B companies for RM60m

F&N buys three F&B companies for RM60m
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KUALA LUMPUR (Dec 15): Fraser & Neave Holdings Bhd (F&N) has announced that it will buy the entire issued share capital of three food and beverage (F&B) companies — Sri Nona Food Industries Sdn Bhd, Sri Nona Industries Sdn Bhd and Lee Shun Hing Sauce Industries Sdn Bhd — for RM60 million in cash.

According to a filing with the local stock exchange today, F&N’s direct wholly-owned subsidiary Awana Citra Sdn Bhd had on Dec 13, 2020 entered into a conditional share sale agreement (SSA) with vendors Siew Yun Sing and Tong Saw Man for the proposed acquisition, which will be funded via the company’s internally generated funds.

The proposed acquisition is in line with F&N’s ambition to be a stable and sustainable F&B leader in Malaysia, with Halal food as its new pillar of growth.

“The investment will add an established Malaysian household food brand to F&N’s portfolio of renowned brands and will serve as a platform to build on and expand into more food segments,” said F&N.

The principal activities of these three companies are the manufacture, distribution and sale of rice cakes (ketupat), condiments (oyster sauce and paste), beverages (ginger tea powder), desserts (pudding and jelly powder), jams and spreads under the “NONA” and “Lee Shun Hing” brands.

Save for the liabilities in the financial statements of each of the three companies, which will be consolidated into the group’s results, there are no other liabilities to be assumed by F&N arising from the proposed acquisition.

Additionally, the proposed acquisition is not expected to have a material effect on the group’s consolidated earnings and earnings per share.

None of the directors, major shareholders of F&N and/or persons connected to them has any interests, direct or indirect, in the SSA.

Barring any unforeseen circumstances and subject to the fulfilment of the conditions precedent under the SSA, the proposed acquisition is expected to be completed in the first quarter of 2021.

As at the time of writing, F&N’s shares were still untraded. The stock was last traded yesterday at RM31.94, valuing the company at RM11.71 billion. From this year’s trough of RM27.62, the counter has risen 15.6%. Year to date, however, it is still 8.3% lower from RM34.84.

Lam Jian Wyn