Chinese chicken meat producer Fujian Sunner Development Co. announced yesterday the closing of Kohlberg Kravis Roberts' strategic investment.
KKR entered an agreement in August to invest about $400 million (£257.84 million; €359.23 million) in Sunner for an eighteen percent stake at RMB 12.3 per share ($2.00 per share). The private equity firm did not disclose the fund that backed this investment, which will support Sunner's operations to provide safe chicken products to Chinese consumers.
“We are honoured to partner with a company of this calibre and are excited to advance our own commitment in creating a safer and more secure food supply in China,” said David Liu, co-head of KKR Asia Private Equity and chief executive of KKR China.
This strategic partnership between KKR and Sunner is part of the firm's solutions investing in Asia Pacific, where it invests in companies that provide a solution to issues affecting the region. Sunner plans on increasing its production volume by thirty percent this year and more than doubling its production capacity to 750 million heads of white feather chicken by 2019.
The investment took nine months to close due to personnel changes in certain Chinese regulatory departments that elongated the process, according to a source familiar with the matter. The firm had expected to take at least six months, the earliest typical approval timeframe in China, the person said.
Along with this equity investment, KKR and Sunner have a strategic cooperation agreement focusing on operational improvement, corporate governance and other initiatives.