Nestle to buy 60% stake in Yinlu Foods

Nestle (NESN.SIX) announced a deal to purchase 60% of Yinlu Foods Group in a bid to expand its exposure to the China market, the Financial Times reported. While the Swiss firm did not disclose the purchase price, analysts estimate that the value of the stake in Yinlu – a family-owned company based in Fujian – ranged between US$602 million and US$1.1 billion. The deal will almost double the number of Nestle employees in China from about 14,000 to 26,000, and will help the firm boost sales by about a quarter. Analysts responded favorably to the announcement. Nestle recently released first quarter figures for 2011, which showed that its sales in emerging markets rose by almost 14%, compared to just 4.3% in Europe and 3.9% in the Americas.