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KKR, Baring, HOPU, Boyu back China’s COFCO Meat

6 Jun 2014

hogPrivate equity firms KKR, Baring Private Equity Asia, HOPU, and Boyu have joined forces to invest in Chinese group COFCO’s subsidiary COFCO Meat.

The firms did not disclose the terms of the deal, but Reuters reported that KKR agreed to invest around $150m from its second Asian fund and the consortium will buy a 70 per cent stake for $270m.

China accounts for more than half of global pork consumption, according to the US Department of Agriculture and the China Animal Industry Yearbook.

Large hog farms with an annual output of 50,000 or more hogs contribute less than on per cent of the total domestic supply and such farms are expected to increase more than sixfold by 2020, the data showed.

Managing director of Baring Private Equity Asia Guy Cui said, “The investment in COFCO Meat is an excellent example of the consortium’s ability to invest in a diversified-ownership structure and support an important policy imperative to provide consumers with better food quality and safety.

“We look forward to working with the management team at COFCO Meat and contributing to its future growth and development.”

Earlier this year COFCO bought a 51 per cent stake in supply chain manager Noble Group for $1.5bn.

An investor consortium led by China-focused private equity firm Hopu will invest alongside Cofco for a minority stake.

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