Fraser & Neave Holdings Bhd (F&N) announced on 15 December 2020 that it has entered into a conditional share sale agreement (SSA) with vendors Siew Yun Sing and Tong Saw Man to buy three food and beverage (F&B) companies — Sri Nona Food Industries Sdn Bhd, Sri Nona Industries Sdn Bhd and Lee Shun Hing Sauce Industries Sdn Bhd. The value of the transaction is RM 60 million.
The proposed acquisition will be funded via the company’s internally generated funds.
Each of the Sri Nona Companies was incorporated in Malaysia pursuant to the Companies Act 1965. The principal activities of the Sri Nona Companies are the manufacture, distribution and sale of rice cakes (ketupat), condiments (oyster sauce and paste), beverages (ginger tea powder), desserts (pudding and jelly powder), jams and spreads under the “NONA” and “Lee Shun Hing” brands owned by the relevant Sri Nona Companies.
The proposed acquisition is in line with F&N’s ambition to be a stable and sustainable food and beverage leader in Malaysia, with Halal food as their new pillar of growth. The investment will add an established Malaysian household food brand to F&N’s portfolio of renowned brands and will serve as a platform to build on and expand into more food segments.
Our take is F&N is trying to make itself relevant to the COVID-19 driven growing in-home dining and dessert making trends by acquiring Sri Nona Companies.