Bright Food Group Co., a state-owned Chinese food conglomerate, is close to finalizing a deal to purchase U.S. vitamin retailer GNC Holdings Inc. Reuters reported Dec. 7 that Bright Food would purchase GNC for $2.5 billion to $3 billion in a move that would bring the well-known foreign brand to China’s growing middle class. The deal could be announced within the next several days, Reuters reported.
Pittsburgh-based GNC is currently owned by Ares Management and the Ontario Teachers' Pension Plan Board. As Reuters reported, the Chinese government has been scooping up foreign assets in recent months, but the purchase of a U.S. consumer company by a Chinese firm is less common. Bright Foods, which is backed by the Shanghai city government, operates mostly in the dairy market and faces stiff competition from other local players.
GNC and Bright Foods are not new to one another. In February, the supplement retailer announced that it was partnering with Bright Food Group to introduce GNC supplements and nutritional products to the Chinese market. The plan was for GNC to collaborate with Shanghai Yantang Group, a wholly-owned subsidiary of Bright Food, to form the joint venture GNC China.
“Bright Food’s partnership with GNC in nutritional products will not only introduce GNC’s popular products into China,” Jungie Ge, vice president of Bright Food and chairman of Shanghai Yantang Group, said at the time. “But we will also seek GNC’s assistance to improve and upgrade selected Bright Food products. In the future, the products of GNC and Bright Food’s health related products will be sold in a wide range of retail formats in China.”
According to Nutrition Business Journal research, China’s supplement sales grew 9.3% to $8.1 billion in 2008, and the country is poised to become the world’s largest supplement market in coming years. “Based on our research in the nutrition industry in China, GNC believes there are significant growth opportunities in the PRC marketplace,” said Joe Fortunato, chief executive of GNC, said in February. “We look forward to working with Bright Food, which has strong product, distribution and retail capabilities in China.”
Read the Reuters article.