Cofco Meat Holdings Ltd, the Chinese mainland pork producer part-owned by KKR & Co, is seeking to raise as much as $333 million in a Hong Kong initial public offering. The State-backed company is offering 975.6 million shares at HK$2 (25 US cents) to HK$2.65 apiece, according to terms for the deal that were obtained by Bloomberg on Monday [17 October 2016]. Haier Group Corp agreed to buy $57.4 million of stock as the biggest cornerstone investor in the offering, the terms show…Full Article: China Daily Oct 2016

Key Point

  • Other investors in COFCO Meat’s IPO included China Life Insurance ($20 million worth of shares) and China Life Franklin Asset Management ($10 million worth of shares).

ChinaAg Comments

  • In May 2016, Singapore’s Temasek Holdings, China Investment Corp (CIC) and KKR advanced to the second round of bidding for a minority stake in Yum’s Chinese division. At the time, Yum Brands Chinese division was valued between US$8 billion to US$11 billion. The second round of bids is for approximately a 20% stake in the new company.
  • In March 2016, the private equity firms of KKR and Hopu Investments were rumored to be investors in Yum Brands’ new Chinese spinoff.
  • In 2015, Hopu Investment Management sold its share of COFCO Meat (original investment made in 2014) to Singapore’s Temasek Holdings.
  • In June 2014, Kohlberg Kravis Roberts (KKR), Baring Private Equity Asia, Hopu Investment Management and Boyu Capital bought a stake (unknown %) in COFCO Meat, a subsidiary of COFCO Group.
  • In April 2014, COFCO acquired a 51% stake (estimated at US$1.5 billion) in Noble Group’s Agribusiness Division (trades in grains, oilseeds, sugar, cocoa, cotton, and coffee). COFCO’s February 2014 investment in Nidera and April 2014 investment in Noble Group was 60% financed by COFCO and 40% by outside investors such as: Hopu Investment Management (Chinese private-equity firm), Temasek Holdings (Singapore state-owned investment firm), Standard Chartered Private Equity, and the World Bank’s International Finance Corporation.
  • In February 2014, COFCO purchased a 51% stake (estimated at US$1.2 billion) in Nidera, a Dutch grain trading company.
  • Founded in 2010 and headquartered in Hong Kong, Boyu Capital is a private equity firm that was launched by Alvin Jiang (ex-Goldman Sachs employee), the grandson of former party chairman Jiang Zemin. In 2012, Boyu Capital, China Investment Corp. (CIC), Citic Capital and China Development Bank bought a 5.6% stake in Alibaba, an e-commerce platform.
  • Founded in 2009 and headquartered in Beijing, COFCO Meat (subsidiary of COFCO Group) is a major Chinese pork producer whose product line includes pork ribs, pork belly, pork loin, sausage, bacon, and sliced ham. COFCO Meat has hog breeding operations in Tianjin, Hubei Province, Jiangsu Province, Jilin Province, Hebei Province, and Inner Mongolia Region. The company also imports meat products from Brazil (chicken), Chile (beef, chicken), Germany (pork), Denmark (pork), Australia (beef), and New Zealand (lamb).
  • Launched in 2007 and headquartered in Beijing, Hopu Investment Management (aka Magnolia Fund) is a private equity firm whose initial financial backers (~US$2.5 billion) included Singapore’s Temasek Holdings, Goldman Sachs, and Shell Oil. In July 2009, COFCO Group (70% control) and Hopu Investment (30% control) bought a 20% stake in China Mengniu Dairy (HKG:2319).
  • Founded in 1997 and headquartered in Hong Kong, Baring Private Equity Asia is a private equity firm whose investment portfolio includes China Shengmu Organic Milk (January 2014), COFCO Meat (June 2014), and Weetabix (April 2015).
  • Founded in 1984 and headquartered in Qingdao, Shandong Province, Haier Group is a Chinese home appliance manufacturer.

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