MILAN, Oct. 19 (Class Editori) -- Guala Closures S.p.A., the leading Italian multinational in closure systems for alcoholic and non-alcoholic beverage bottles, purchased a controlling interest in Yibin Fengyi Packaging Co, a top manufacturer of closures and boxes in the premium market for Baijiu, China's most renowned traditional liquor.
The company, headed by Gabriele Del Torchio, financed the operation through the issuance of a 350 million euro senior secured bond and plans to provide an additional 250 million dividend to its controlling shareholder Investindustrial and co-investors.
The acquisition in China, announced in September with closing expected soon, presents a significant growth opportunity for Guala Closures, considering the fact that the Chinese market features 5 billion safety and luxury closures, the strong growth of the premium Baijiu industry, the limited presence of Guala Closures and other international closures manufacturers in the region.
Guala has been present in China since the late 1990s, with the establishment of a manufacturing plant in Beijing. The new deal also offers valuable development opportunities by facilitating potential acquisitions in the fragmented closures market.
At the same time, Guala Closures celebrated the opening of its new Chengdu plant, the seventh R&D Center of the Group. The construction of the plant began in 2022 and it complements the company‘s local presence in China, where Guala has four production sites in Chengdu, Yibin, Luzhou, and Guizhou covering the Golden Triangle area of Chinese liquor. Guala's operations in China will be merged with Fengyi to form the new company Guala Closures Fengyi.
Based in Yibin, Sichuan, Fengyi operates three production plants, including one currently being built. The company generated approximately 38 million euros in revenue and had an EBITDA of about 5 million in the 12 months ending June 30, 2023. Zhu Yinzhang and Zhuo Yumin, entrepreneur-managers of the company, will sell the majority stake while continuing to manage the company in China and holding onto a significant minority stake.
"The merger between Guala and Fengyi will not only strengthen the Group‘s offerings in China, with a special focus on the essential Baijiu region but also across Asia," Gabriele Del Torchio, the Chairman of Guala, said, adding that "China is a fragmented yet significant market that presents substantial growth potential for the new entity".
"Initially, Investindustrial supported our business development plans in China by helping to establish our new plant and R&D Center in Chengdu. They furthered our growth by guiding us to the appropriate partner for the acquisition of Fengyi," he stated. "This acquisition and investment in Chengdu reiterate our economic commitment to the region. Guala Closures has operated in China for 25 years since opening its manufacturing plant in Beijing. We were impressed by the well-respected and prominent management team at Fengyi. We anticipate collaborating with them to expand our business in China and the wider Far East region".
(Source:Class Editori)
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