Chinese investors cast eyes on Denmark meat sector

Leading Danish meat processing companies, including Danish Crown, Hanegal and Skare Meat Packers, are attracting renewed acquisitive interest from industrial groups in China.

However, the interest shown to date has yet to lead to formal investment offers or talks between Chinese investors and Danish targets.

"It’s not surprising that we are seeing investor interest from China or that the focus is on major domestic producers like Danish Crown, which is already active in China. [But] Chinese investor interest is something very new for Denmark’s meat industry," said Anders Moltke-Leth, a Danish investment broker, who regards the prospect of Chinese capital flowing in to the Danish meat industry as a positive development.

"China is looking to invest and expand its industrial reach outside its home market and Denmark is on its radar," Moltke-Leth told GlobalMeatNews. He first acted as an intermediary in 2013 when an unnamed "major Chinese pension fund" showed interest in acquiring a 10% to 15% equity holding in Danish Crown.

The offer, said Moltke-Leth, was relayed by him to Danish Crown’s chairman Erik Bredholt. There was no reaction from Danish Crown, said Moltke-Leth: "I can well understand that Danish Crown receives many enquiries on an ongoing basis, but obviously the company was not interested in knowing more. This is interesting, especially since many Danish farmers are hard-pressed financially right now. The Chinese fund I was acting on behalf of also showed an interest in buying up distressed farms," Moltke-Leth added.

Increased interest in Denmark from Chinese investors can be expected as a natural development arising from future growth in Europe, said Monica Reib, a mergers and acquisitions (M&A) specialist, who heads-up the Chinese-Danish legal affairs desk at the Copenhagen-based law firm Bech-Bruun.

"The Chinese are often not good at the introductory phase, because they do not want to show they are interested, so it can be difficult to start a dialogue," said Reib. Danish company leaders, said Reib, prefer direct contacts rather than communications routed through intermediaries.

"Leading Danish companies will not become involved with dealing with enquiries in situations where they do not know who is behind the enquiry and what the nature of the contact is all about," Reib said. 

Danish Crown is aware of Chinese interest, said director of corporate communications Anne Villemoes. The Danish meat group, she said, receives up to 20 business partnership and investment-related enquiries from Chinese groups each week. "Because of our size, we have contact with all the leading investors in China," said Villemoes.