The Kraft and Heinz merger combines several of the world's most iconic brands in the food and beverage industry. (Photo : Business Insider/Kraft Foods Group)
After the successful merger of international food and beverage giants Kraft Foods Group and Heinz in June, both companies are now eyeing China's lucrative market.
The combined company, Kraft Heinz, is now the fifth-largest food and beverage company in the world with combined revenues of around $28 billion.
Li Na, a Heinz China manager, told the National Business Daily earlier this week that after the merger, both sides will jointly use production lines in China and that Kraft products could be sold in Chinese markets through the Heinz distribution network.
Under the agreement, Heinz and Kraft shareholders will own shares of 51 percent and 49 percent, respectively, of the new company, with Kraft shareholders getting an additional cash dividend of $16.50 per share, Na said.
Six of the 11 seats of the board of directors of Kraft Heinz will also be taken by former Kraft board of directors.
Kraft foods could promote its business outside the United States through Heinz's global distribution network, said Kraft Heinz CEO Bernardo Hees, adding that Heinz's distribution and brand reputation in the Chinese market could help it make forays into the Chinese market.
Hees has visited China three times over the past six months and has "attached great importance to Chinese business," a source close to Heinz told the National Business Daily.
According to China Condiment Industrial Association deputy head Wei Xiangyun, while there are more than 2,000 food enterprises in China, low brand concentration makes it still a fully competitive market.
