Bright Food NIS4.78 billion acquisition of Tnuva

Overview:

• State-owned Chinese food group, Bright Food, acquired 76.8% in Tnuva, Israel’s largest food company, for NIS4.78 billion from Apax Partners and Mivtach Shamir Holdings.
• By value, the deal was the largest acquisition of an Israeli company by a Chinese buyer, and the largest in the Israeli food industry to date.   
• As part of the transaction, Bright Food agreed a NIS2 billion ($500 million) syndicated financing led by Bank Hapoalim, and including Bank Discount, First International Bank of Israel, and Clal Insurance Enterprises Holdings. 
• UK based fund, Apax, and Mivtach Shamir, an Israeli investment group, help 56.7% and 21% in Tnuva respectively.
• According to Israeli press reports the deal represents a good return for the sellers, with Apax and Mivtach making profits of around NIS3.5 billion and NIS462 million respectively on their initial investments in Tnuva in 2008.  
• The Tnuva deal is part of China's strategy to improve the quality of its food production through the acquisition of technology, and to meet increased domestic demand for dairy - especially cheese - products. 
• Tnuva did not use outside legal counsel on the transcation. 

Ben Naylor - Regional editor