Hony Capital (Beijing) Co. Ltd. is betting on China’s rising middle class to develop a keener taste for European food after snapping up Britain’s Pizza Express for 900 million pounds (US$1.54 billion).
The deal was the biggest in the European restaurant market in five years.
“China is the biggest consumption market in the world. About 3 to 4 percentage points of the country’s gross domestic product come from consumption,” Economic Times reported Wednesday, citing founder and chief executive John Zhao.
He said demand for entertainment, medical services and dining will climb with the rapid growth of the middle class.
Pizza Express operates 505 restaurants in the United Kingdom, Asia, the Middle East and the Mediterranean. The group already runs 12 restaurants in Hong Kong, five in Shanghai and one in Beijing.
The acquisition by Hony Capital, the private equity unit of China’s Legend Holdings, is the latest in a string of Chinese deals for British food brands. In May 2012, Bright Foods bought a 60 percent stake in cereal maker Weetabix.
Hony Capital expects annual growth of 8-9 percent in the coming years as the European economy continues to recover.
Between 2008 and 2012, Britain’s mass-market food and beverage sector still managed to grow 5.5 percent annually during a downturn.
Zhao said the acquisition of Pizza Express allows the transfer of foreign techniques and processes to China, helping improve domestic food safety standards.
China is reeling from a food safety scandal involving the supply of expired meat to western restaurants including McDonald’s and KFC.
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