A billboard for Bright Food Group Co Ltd at an exhibition in Shanghai. Bloomberg reported that the company has agreed to pay about A$400 million ($416 million) for a 75 percent stake in Australia's Manassen Foods.[Photo/China Daily]

SHANGHAI - Bright Food Group Co Ltd, a leading Chinese food manufacturer, is finalizing an acquisition deal with an Australian food distributor in a bid to expand its presence overseas, a company spokesman said on Monday.

The move would see Bright Food "form a comprehensive strategic partnership" with Manassen Foods Australia Pty, a branded food business, as the State-owned Chinese company seeks to boost overseas sales to as much as 30 percent of its total in five years, said Pan Jianjun, a company spokesman.

Bloomberg reported that Bright Food has agreed to pay about A$400 million ($416 million) for a 75 percent stake in Manassen, the maker of the Albatros bread and Harringtons chocolates brands.

However, Pan said the details, including the bid price, are still "under negotiation" and the purchase is subject to approval from governments on both sides.

The Chinese food maker will buy the stake from Champ Private Equity in a deal that will give Manassen an enterprise value - a measurement that includes the company's debts - of about A$530 million, according to insiders familiar with the matter.

The initiative was first proposed several months ago, following a number of failures by Bright Food to purchase stakes in major foreign producers. "Through this partnership, our products can gain better access to the high-end Australian market, where competition is even more heated," Pan said.

Bright Food was established in 2006 amid a series of mergers and consolidations of State-owned assets. Shanghai's municipal government is the company's controlling stakeholder. Currently, the parent, Bright Food Group, owns four listed companies, namely Bright Dairy & Food Co Ltd, Shanghai First Provisions Store Co Ltd, Shanghai Maling Aquarius Co Ltd and Shanghai Haibo Co Ltd.

Bright Food's first-half sales grew 18 percent year-on-year to 35.7 billion yuan ($5.6 billion), according to an Aug 5 statement. Net income for the same period surged 21 percent year-on-year to 1.63 billion yuan.

To beef up its market vitality, the company has long sought to acquire businesses abroad. But in March, it lost out to General Mills Inc in a bid to purchase of the French yogurt maker Yoplait SA. Meanwhile, Wilmar International Ltd last year outbid Bright Food for the sugar unit of CSR Ltd.

The company is expanding three major businesses - dairy, wines and sugar - overseas. Its target destinations are Australia, New Zealand, North and South America and Europe, according to Ge Junjie, Bright Food's deputy general manager, in March.

The company held a 5.7 percent share of China's 174-billion-yuan dairy market in 2010, ranking it fourth in the domestic market, according to data from Euromonitor International.

Bright Food accrued market share of 1.4 percent in terms of packaged foods and 1.6 percent in the ice cream market, said the London-based researcher. Major competitors include domestic counterparts such as Inner Mongolia Mengniu Dairy (Group) Co Ltd and Inner Mongolia Yili Industrial Group Co Ltd, in addition to foreign players such as Nestl SA.

Zhang Huiming, head of the Enterprise Research Institute at Fudan University, said Bright Food's previous failures are largely attributable to its insufficient investment plans.

"Companies should always use financial institutions to diversify their investment portfolio, which increases the odds of success. Bright Food must have learned a lot from its seasoned rivals in terms of acquisition plans and negotiation skills," said Zhang.