BEIJING, June 4 (Reuters) - China’s largest pig and poultry producer Wens Foodstuff Group Co Ltd plans to buy Jiangsu Jinghai Poultry Industry Group Co Ltd to diversify its businesses as the country’s hog market remained in the grip of African swine fever, the company said on Tuesday.
The pig farmer, which produced 22 million pigs in 2018, will buy 80% stake in the poultry firm for an estimated 640 million yuan ($93 million), the company said in a filing to Shenzhen stock exchange.
The acquisition will be a first attempt for Wens Foodstuff to enter the white feather broiler chicken market and complement its existing yellow feather business, the company said.
Poultry prices in China are rising on the back of the African swine fever epidemic that has reduced the hog herd by more than 20% by April, triggering a looming pork shortage. Chicken is often used as a substitute for pork.
Wens Foodstuff has seen its net profit drop significantly in 2018 and tumbled to red in the first quarter 2019.
The target company is the biggest broiler breeder farmer in China’s east Jiangsu province with total assets of 400 million yuan, according to the company’s website.
Wens Foodstuff will fund the acquisition by cash, shares and convertible bond issue, it said.
$1 = 6.9084 Chinese yuan renminbi Reporting by Min Zhang and Dominique Patton; editing by David Evans