Nestle expands further in China

Chasing fast-growing markets, Nestle is moving to buy a 60 percent stake in Chinese sweets and snacks maker Hsu Fu Chi.

The world’s largest food company would pay a hefty 1.2 billion euros in its biggest deal so far in China. Analysts said future growth potential made it worth it.

Nestle has a target of 45 percent of sales from emerging markets in about 10 years.

The deal still has to be approved by regulators – China’s commerce ministry and authorities from Cayman Islands, where the company is incorporated.

Nestle strengthened its dairy business in China earlier this year when taking a 60 percent stake in Yinlu Foods Group for an undisclosed sum.

Hsu Fu Chi is listed in Singapore and reported sales of 570 million euros in 2010. It employs 16,000 people.

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