Chinese Food Company Approaches for CSR Sugar Business

CSR, a company that focuses on Aluminium, sugar and production of building materials was approached by China based food manufacturer Bright Food Group which placed its $1.5 billion bid for the renewable energy and sugars business of the company. The news is being considered as a sign that Chinese companies are now getting more interested about other business sectors of Australia. In the past, most of the Chinese companies kept their focus on the mining and energy sector of the country.

However, CSR has shrugged off the recent Bright Food Group proposal terming it as merely an expression of interest and stated that it will continue to demerger the sugar unit. It is to be mentioned that last year CSR declared that it was planning to demerge its renewable energy and sugar business from rest of the company where two separate companies were to be created with one will dealing with the Sugar business while the other focusing on the building products. Bright Food Group has delivered a letter to CSR today proposing a takeover bid that worth $1.5 billion. The company also added that it could not go for a final valuation of the CSR sugar unit due to lack of information. Ge Junjie, the Vice President of the Chinese food manufacturer stated that his company is willing to expand its network in the Australian food industry with focus on the sugar sector. He also added that the acquisition aligns with the long term strategies of CSR to establish businesses that are related to resources.

In its statement, CSR mentioned that the proposal presented by Bright Food was not capable enough to get a CSR approval and several conditions are needed to be taken under consideration for completing a deal like that. The Chinese investment in Australia soared significantly during 2009, taking the investment to $US 10.7 billion which is almost four times higher than its investments during 2008. The CSR shares went up by 3.8 percent hitting $2.04 by early afternoon following earlier rise of 8.4 percent.