Ajinomoto Said to Mull Sale of Hong Kong's No. 1 Soy Sauce Brand

Vinicy Chan

31 May 2018, 11:05 AM IST

(Bloomberg) -- Ajinomoto Co. is considering a sale of Amoy Food Ltd., the century-old company that makes Hong Kong’s most popular soy sauce brand, people with knowledge of the matter said.

The Japanese seasoning company is working with an adviser to gauge potential buyers’ interest in the unit, according to the people, who asked not to be identified because the information is private. A sale of Amoy, which began producing the condiment in China in 1908, could fetch about $70 million to $80 million, the people said.

Ajinomoto is mulling a deal as Asian private equity firm Unitas Capital is pursuing a potential $600 million sale of another Chinese condiment producer. Jiahao Foods, which produces wasabi, chicken powder and soy sauce in China, has attracted interest from potential suitors including Hormel Foods Corp., people familiar with the matter said last month.

Deliberations on a potential sale of Amoy are at an early stage, and Ajinomoto could decide to keep the business, the people said. A representative for Ajinomoto said in response to Bloomberg queries that nothing has been decided.

Ajinomoto bought the Amoy business from Danone for roughly HK$1.8 billion ($235 million) in 2006. About two years later, it recorded an impairment loss of 13.4 billion yen ($122 million) on the goodwill of the unit.

While Amoy is the most popular soy sauce brand in Hong Kong, where it had a 36 percent market share last year, it doesn’t break into the top five in mainland China, data from Euromonitor International show. The Chinese market for soy sauce is expected to grow 28 percent to 86.2 billion yuan ($13.5 billion) in the five years to 2022, according to the data.

Amoy changed hands several times before the Japanese firm took it over, its website shows. Prior to Danone buying the business in 1991, major shareholders have included American baking giant Pillsbury, Hong Kong property tycoon Ronnie Chan’s Hang Lung Development Co. and Malaysian conglomerate Sime Darby Bhd.

--With assistance from Maiko Takahashi.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Peter Vercoe