Nestlé has agreed to sell its Yinlu peanut milk and canned rice porridge businesses in China to Food Wise Co. for an undisclosed sum.
The company announced that it was looking to sell its Yinlu businesses in its first quarter 2020 results.
The deal with Food Wise Co., a company controlled by the family of Yinlu founder Chen Qingshui, encompasses all of Yinlu’s operations, including its five factories. Yinlu brands recorded sales of CHF 700 million ($767.5 million approx.) in 2019.
The company says that the divestiture will allow it to focus on its key categories in China of infant nutrition, confectionery, coffee, culinary, dairy and pet care.
Earlier this year, the company announced that it will build its first production facility for plant-based food products in the country.
As part of this latest transaction, Nestlé will retain its ready-to-drink (RTD) Nescafé coffee business and distribute the products across most of the Greater China region.
Yinlu will continue to make the Nescafé RTD products and will distribute them in several provinces. Yinlu will also continue to manufacture and sell Nestea products under license from Nestlé.
The transaction is expected to close by the end of this year.