Five Shanghai group companies will combine to form a giant food company.

The Bright Foods Group Company will have an estimated capital of more than 45 billion yuan (US$5.6 billion), making it the largest venture of this kind in the local food industry.

The five groups are SAICG, Bright Foods Group Co Ltd, Jin Jiang International Holdings Co Ltd, Shanghai Maling Aquarius Co Ltd and Shanghai Sugar Cigarette & Wine (Group) Co Ltd.

The new company will go public in mid-August. Details of the deal are still under negotiation, said the spokesman of the state-owned Assets Supervision and Administration Commission of Shanghai Municipal Government, who will oversee the deal.

"This deal will benefit local food industry, because it will form a systematic production, supply and sales line for the industry," said the spokesman surnamed Zheng.

Fu Su, an analyst from Xiangcai Securities, said: "The firms include those who have access to material supplies and supermarkets, so they can draw on each other's advantages, and this deal will avoid competition that sometimes occurs after combination because the resources that will be combined are quite different."

The current Bright Foods is a comprehensive food group company invested by the Shanghai Light Industry Holding Company (Group) and the Shanghai Media & Entertainment Group.

Talks on the deal started three years ago, but it has taken the parties involved until now to reach an agreement.

(Source: www.shanghai.gov.cn )