Heinz has entered into an agreement to sell its frozen food business in China, Long Fong Food, to frozen food manufacturer Sanquan Foods Co.
Sanquan announced its subsidiary, Country Ford Development Ltd, has reached an agreement of intent with Heinz to acquire its frozen food assets in a regulatory filing with the Shenzhen stock exchange on Friday (23 February). While the framework of the deal is still being negotiated, the acquisition is expected to close in about four months.
Sanquan said the transaction would be funded by cash on hand but did not provide further financial details.
The move will boost Sanquan’s competitiveness in the Chinese market for frozen foods, the group said. In 2012, Sanquan accounted for almost 11% of frozen food sales in China.
Heinz, whose board backed a US$23bn sale to investors led by Warren Buffett last week, was unavailable for immediate comment.