Wahaha in a bid to acquire British company KP Snacks

Hangzhou Wahaha Group Co, a leading food and beverage provider in China, is reportedly bidding to acquire KP Snacks, the snack unit of United Biscuits Plc, a British food company, for 520 million pounds ($ 816 million), British daily The Telegraph reported Sunday.

The snack unit has been put on sale by its private equity owners, the Blackstone Group LP and PAI Partners, with Credit Suisse as the advisor. A detailed sales plan has been sent to six likely buyers including Wahaha Group, said the report.

Wahaha Group told the Global Times Monday that the group was not aware about the report.

Some experts said that there is nothing unusual about Wahaha Group acquiring a foreign snack company.

"The domestic food and beverage producers have been actively expanding in the overseas markets by acquiring their foreign counterparts in recent years. For example, Shanghai-based Bright Foods (Group) Co, has completed three overseas acquisitions by now," Dai Qiaoling, executive director of Frost & Sullivan China, told the Global Times Monday.

In its latest acquisition, Bright Foods purchased 60 percent stake in Weetabix Food Co, a British breakfast cereal producer, in May. "The acquisition of a well-known foreign snack producer would help Wahaha Group enrich its products, expand its market overseas and enhance its brand image around the world," Zhao Yong, an M&A expert focusing on the food and beverage industry with Shanghai-based Haitong Securities, told the Global Times Monday.

Wahaha Group divides its branded products into 15 kinds, and only Wahaha Sunflower Seeds falls in the category of snacks, according to its official website.

"Wahaha Group gains profits largely from its beverage business, especially the Nutri-Express Drink and Fruit Juice series of products. Its sunflower seeds are barely seen in the market," said Fan Jie, a food industry consultant with Adfaith Management Consulting Monday.

KP Snacks owns brands like McCoy's, Hula Hoops and KP nuts, which would fill the gap between Wahaha and other food & beverage makers like Danone, a French food multinational, in China, Zhao said, "which will help the group gain more market share in China's food and beverage industry."

In 2010, the private equity firms planned to sell the biscuit and salty snacks operation to Bright Foods for 2.5 billion pounds, but the deal did not materialize, according to The Telegraph report.