Sanquan Food, a Chinese frozen food giant, has signed an agreement with Country Ford and Heinz (China) to wholly purchase Long Feng Food, a subsidiary of Heinz, which has itself been acquired by Warren Buffett's Berkshire Hathaway and Brazil's 3G Capital.
The deal is expected to be completed in about four months, but the purchasing price hasn't been disclosed yet. Heinz has tried long and hard to expand into China through mergers and acquisitions with a focus on infant foods and sauces as well as frozen foods. But Long Feng has been a money loser for the company.
"Heinz is not very good at the business of frozen foods that Long Feng Food didn't catch opportunities during the past five years in Chinese market," said Zhu Danpeng, researcher in China Food Business Institute. According to Heinz (China), Heinz wrote off $36 million in the last quarter from Long Feng, which sold $27 million worth of frozen food in the nine months prior to January 2013.
