McCormick to acquire Chinese bouillon manufacturer
SPARKS, MD. — McCormick & Co., Inc. has agreed to buy the assets of Wuhan Asia-Pacific Condiments Co., Ltd., a privately held Chinese manufacturer of DaQiao and ChuShiLe brand bouillon products, for about $141 million.
“McCormick first entered China more than 20 years ago to provide a local source of supply to industrial customers,” said Alan Wilson, chairman, president and chief executive officer of McCormick. “From this foundation we launched the McCormick brand of flavor products for consumers. Today, McCormick is one of the leading brands of spices and seasonings, with particularly strong category share in the coastal regions. Across both our consumer and industrial business, we operate profitably in China and have grown sales at a 16% compound rate for the past five years.
“The addition of W.A.P.C. extends our brand range of flavors in China with bouillon. In W.A.P.C.’s top markets, more than half of consumers use chicken bouillon each day at every meal to enhance the flavor of their food. This business is strong in central China, which fits well with McCormick’s presence in the coastal regions. The management and employees of W.A.P.C. have built a great business and are driving rapid growth. We look forward to working with them to achieve continued success.”
The acquisition is expected to be completed in mid-2013 and is subject to regulatory approval. W.A.P.C. has annual sales of about $115 million. McCormick expects the acquisition to increase earnings per share in 2014 and be fully accretive in 2015. For 2013, the company expects a slightly dilutive impact to earnings per share as the result of integration and financing costs as well as an estimated $4 million in costs related to the completion of the acquisition.