The acquisition of Chinese bouillon maker Wuhan Asia-Pacific Condiments (WAPC) by McCormick & Co. will more than double the US spice group’s sales in the country.
McCormick announced this morning (31 May) that it has entered into an agreement to acquire WAPC for CNY900m (US$147m).
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According to Joyce Brooks, McCormick VP of investor relations, the WAPC deal will increase McCormick’s Chinese revenues by around 60%. WAPC currently generates sales of CNY750m and is a category leader in central China.
The US group boasts an annual compound growth rate of 25% and McCormick said today that it expects to continue to grow sales of WAPC brands by “at least” 10% going forward.
Brooks told just-food the acquisition would improve McCormick’s geographic spread in the country and allow the company to feed new products into the WAPC/McCormick distribution networks.
“With McCormick brand strength in coastal regions and WAPC in central China there are opportunities for distribution expansion with our expanded portfolio of brands in both regions.”
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By GlobalDataBrooks added: “The stratgic rationale for this acquisition is largely for growth rather than synergies.”
