Changsha, China, 5 May 2008 - CITIC Capital Holdings Limited (or 'CITIC Capital') today announced that it has, through its China private equity fund, entered into an agreement with Mainland listed Hunan AVA Holdings Co. Ltd (or 'AVA') to acquire a 100% interest in AVA's infant formula and dairy business, at a cash consideration of approximately RMB 570 million.
The acquisition is part of AVA’s asset restructuring plan where under it will focus on real estate development while divesting its businesses not related to real estate development. AVA has separately entered into agreements with other parties for the sale of other to-be-divested assets. The completion of CITIC Capital’s investment will facilitate AVA’s restructuring plan as the dairy business is an integral component to AVA’s to-be-divested businesses.
Infant formula, which represents the majority of AVA’s dairy business, is growing at a rate of 20% per year in China according to industry experts. The main growth drivers for the industry are rising disposable incomes as well as shifting demographic patterns in favor of increased numbers of working mothers.
Since 1956, AVA has developed a strong regional brand – “Nanshan” – which is among the top ten infant formula brands in China and the fifth largest domestic manufacturer. AVA is particularly dominant in the central and southern regions of China.
The above said transactions and the restructuring plan are subject to approvals from the respective regulatory authorities.
About CITIC Capital Holdings Limited
Founded in 2002, CITIC Capital Holdings Limited is a leading China-focused investment management and advisory firm. We manage over US$1.6 billion of capital from a diverse base of global investors. Our core businesses include Private Equity, Real Estate, Structured Finance, Asset Management and Special Situations. Our firm combines deep knowledge of the China business and financial markets with world-class investment expertise in order to create value for investors.
We are part of the CITIC Group, one of China's largest and most comprehensive conglomerates. We currently have over 150 employees located in offices in Hong Kong, Shanghai, Beijing, Tokyo and New York.