Brenntag to Buy Food Ingredients Distributor in China

29.01.2021 - In a move to expand its food and nutrition business in China, Germany-based international distributor Brenntag said it plans to acquire the majority of specialty ingredients distributor Zhongbai Xingye. The activities will become part of the global division of Brenntag Specialties. The deal values the business at about €90 million.

As a first step, Brenntag, which regards itself as global market leader in chemical and ingredients distribution, will take a 67% stake in the Beijing-headquartered company with a wide variety of ingredients in its portfolio, including dairy products and proteins.

Brenntag expects to complete the first tranche of the acquisition in in the first half of 2021, subject to certain contractual conditions and regulatory approval. The Chinese company generated sales of about €146 million over the twelve-month period up to June 2020.

Christian Kohlpaintner, CEO of the Essen-based distribution giant, said Brenntag sees “substantial potential” in the Asia Pacific market, especially in China, which is growing dynamically. The region will play a strengthening role in the group’s M&A strategy going forward, he added.

Kohlpaintner said the Chinese buy is “perfectly in line “with Brenntag’s ambitions, not only geographically but also in terms of industry segment and deal size. The acquisition of the leading player in mainland China is thus “an important step for our company to become a full-line distributor of food ingredients in the Asian market.”