Asian Citrus, the largest orange plantation owner and the single largest orange producer in China, announces that it has entered into an Memorandum of Understanding with BPG Food & Beverages Holdings Ltd. in relation to the Proposed Acquisition of the entire equity interest in Top Honest Holdings Limited ("Top Honest") and Fame Zone Limited ("Fame Zone") (collectively referred to as "Target Project"). Top Honest and Fame Zone, through their wholly owned subsidiaries, respectively hold 92.28% and 0.66% equity interest in Beihai Perfuming Garden Juice Company Limited ("Beihai BPG").
According to a report issued by the fruit and vegetable juice committee of the China Beverage Industry Association on 16 March 2010, Beihai BPG was the leading supplier of tropical fruit juice concentrates in the PRC from 2007 to 2009 in terms of production volume, achieving more than three times the production volume than its next closest domestic competitor. Between 2007 and 2009, Beihai BPG was also the largest producer of pineapple juice concentrate and lychee juice concentrate, with a production volume several times larger than its next closest domestic competitor in the respective segments. Currently, Beihai BPG has an annual output production capacity of over 60,000 tonnes and its products include fruit juice concentrates, fruit purees, and quick-frozen fruits.
There is increasing demand in PRC for healthy food (including both fruits and juice beverages) due to the rapid urbanisation and continuous growth in household incomes and consumers' rising health consciousness.
The Company considers that the Proposed Acquisition will create synergies for the Group through vertical integration into the citrus juice and citrus juice concentrates businesses and also expansion into other tropical fruit juice concentrates. The Proposed Acquisition will also allow the Company to expand into the juice and concentrated juice markets in the PRC in an effective and efficient way, taking into account the market-leading position and scale of the Target Project. Furthermore, as disclosed by the Vendor, the Target Project is well established and has a profitable track record.
The parties to the Memorandum of Understanding have mutually agreed that if the Company is satisfied with the results of its due diligence process and it decides to undertake the Proposed Acquisition, both parties would negotiate and use best endeavours to enter into a formal sale and purchase agreement ("the Formal Agreement") by 31 October 2010, or such date as mutually agreed by the parties.
Under the Memorandum of Understanding, the Vendor has agreed that it will not negotiate with any third party for the sale and transfer of the Target Project from the date of the Memorandum of Understanding up to the date on which the Formal Agreement is entered into.
According to a report issued by the fruit and vegetable juice committee of the China Beverage Industry Association on 16 March 2010, Beihai BPG was the leading supplier of tropical fruit juice concentrates in the PRC from 2007 to 2009 in terms of production volume, achieving more than three times the production volume than its next closest domestic competitor. Between 2007 and 2009, Beihai BPG was also the largest producer of pineapple juice concentrate and lychee juice concentrate, with a production volume several times larger than its next closest domestic competitor in the respective segments. Currently, Beihai BPG has an annual output production capacity of over 60,000 tonnes and its products include fruit juice concentrates, fruit purees, and quick-frozen fruits.
There is increasing demand in PRC for healthy food (including both fruits and juice beverages) due to the rapid urbanisation and continuous growth in household incomes and consumers' rising health consciousness.
The Company considers that the Proposed Acquisition will create synergies for the Group through vertical integration into the citrus juice and citrus juice concentrates businesses and also expansion into other tropical fruit juice concentrates. The Proposed Acquisition will also allow the Company to expand into the juice and concentrated juice markets in the PRC in an effective and efficient way, taking into account the market-leading position and scale of the Target Project. Furthermore, as disclosed by the Vendor, the Target Project is well established and has a profitable track record.
The parties to the Memorandum of Understanding have mutually agreed that if the Company is satisfied with the results of its due diligence process and it decides to undertake the Proposed Acquisition, both parties would negotiate and use best endeavours to enter into a formal sale and purchase agreement ("the Formal Agreement") by 31 October 2010, or such date as mutually agreed by the parties.
Under the Memorandum of Understanding, the Vendor has agreed that it will not negotiate with any third party for the sale and transfer of the Target Project from the date of the Memorandum of Understanding up to the date on which the Formal Agreement is entered into.
