Shanghai’s largest food company Bright Food has expressed an interest in buying the sugar business of CSR Ltd, with reports suggesting the Chinese group has offered up to US$1.4bn for the unit.
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However, the Australian sugar and renewable energy business said that Bright Food’s approach was “merely an expression of interest”.
In a statement, CSR Ltd added on the Australian Stock Exchange that Bright Food had not made any proposal “capable of acceptance by CSR Ltd and indicates a number of conditions and approvals that would be required of any transaction were any proposal to be made and accepted”.
Bright Food’s cash offer for CSR Ltd.’s sugar unit is a means of gaining access to raw materials after global prices more than doubled in the past year.
In a statement, the Chinese group, which is majority-owned by the state, said it was keen to invest in the Australian food industry but in particular sugar.
Vice president Ge Junjie said the acquisition fitted its recent strategy to pursue a “resource-related businesses” including dairy, wine and nutrition products.
If it was successful, Bright Food would acquire mills that account for close to 4% of the global raw sugar trade.
CSR said that Bright Food had previously expressed an interest in the sugar business but that those advances had “similarly lacked certainty as to value, timing and likelihood of completion.”
CSR has been looking into demerging its sugar and renewable energy businesses. It said it would consider a range of options as part of this.
