PARIS French animal health company Neovia has entered exclusive negotiations to buy a majority stake in Chinese pet food maker Sanpo, as it anticipates rapid growth in consumer spending on pets in China.
Neovia, part of cooperative-owned agricultural group InVivo, plans to acquire 60 percent of family-owned Sanpo, China's fifth-largest pet food manufacturer, the unlisted French company said in a statement on Thursday.
It did not disclose the expected value of the investment or Sanpo's financial results.
Neovia has already invested in pet food activities in emerging economies such as Brazil and Mexico, and sees high potential in China where pet food demand represents about 132,000 tonnes annually compared with over 2 million tonnes in Brazil, it said.
The entry of Neovia would also support Sanpo's project to develop a new production plant with an annual capacity of 60,000 tonnes, it added.
Neovia, which changed its name last year from InVivo NSA, reported sales of 1.6 billion euros ($1.7 billion) in its 2015/16 financial year to June 30, of which about 15 percent was generated by pet food.
(Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta)