(Bloomberg) -- Nestle SA has narrowed the list of bidders for its Chinese unit Yinlu Foods Group, which could fetch at least $400 million, according to people with knowledge of the matter.
Fellow food and beverage companies China Resources Beer Holdings Co., Tingyi Cayman Islands Holding Corp. and Dali Foods Group Co. are among suitors selected for the next round of bidding, the people said, asking not to be identified as the information isn’t public.
Private equity firms FountainVest Partners, Affinity Equity Partners and Citic Private Equity Funds Management have also been invited to participate, the people said.
A representative for China Resources Beer Holdings Co. said in an email that the listed company is not involved in this project so far. Representatives for Nestle, Tingyi and FountainVest declined to comment. Representatives for Dali Foods, Affinity and Citic Private Equity did not immediately respond to requests for comment.
Nestle has called for binding bids by the end of August, the people said. The world’s largest food company is working with JPMorgan Chase & Co. on the potential divestment, Bloomberg News previously reported.
Yinlu is well known in China for its ready-made porridge. The company also produces Nescafe ready-to-drink coffee in the country, a business Nestle said it plans to retain.
There’s no certainty the suitors will proceed with binding offers, and Nestle can decide to keep the business, the people said.
Nestle has been revamping its portfolios and divesting assets since Mark Schneider became chief executive officer in 2017. The company said last month that it is considering a sale of its U.S. mass-market bottled water business, including brands like Pure Life, Poland Spring and Deer Park.
Founded in 1985, Yinlu specializes in the production and sale of canned foods and beverages, and was acquired by Nestle in 2011. The company has five production facilities in Xiamen, Shandong, Hubei, Anhui and Sichuan with an annual capacity of up to 6 million tons, according to its website.
(Updates with comment from China Resources Beer in fourth paragraph.)
©2020 Bloomberg L.P.