By Li Hongmei

Bright Food Group, China's second largest food producer, intends to acquire Tunva, Israel's largest food manufacturer, for an estimated price of 10 billion yuan (US$1.63 billion), according to media in Israel.

The company is still in talks with Tunva but has yet to reach an agreement, according to Bright Food spokesperson Pan Jianjun, as cited by the Chinese-language National Business Daily.

"The previous acquisition of four overseas companies represents the beginning of our internationalization strategy, under which we will take over other overseas firms, mainly in the fields of resources and the internet," said Pan. The company plans to securitize the acquired overseas firms in order to reduce the risk, especially financial, associated with acquisitions, according to Pan.

The four foreign firms already brought under Bright Food's fold are a dairy producer in New Zealand, a food producer in Australia, French winemaker Diva and Weetabix Food of the UK.

According to overseas media reports, Bright Food is in talks with Apax Partners, a British private equity fund, for the 56% stake owned by the latter in Tunva.

"We are still only at the stage of understanding and initial contact for the project and have yet to conduct negotiations," said Pan, adding that there is still a long way to go before the deal is completed.

"In view of the advanced agriculture of Israel and the nation's plentiful resources, we may even take over other Israeli firms should the conditions prove right," Pan also said.

According to the National Business Daily, the acquisition of Tunva, if possible, will help Bright Food augment its R&D and management strength in addition to contributing to the internationalization of the Bright brand.