Goldman Sachs may sell stake in Shineway to CDH: report

Nov. 6, 2009 (China Knowledge) - U.S. investment company Goldman Sachs may sell half of its stake in Shineway Group, China's top meat processor, to CDH Investments, a Chinese private equity fund and a major shareholder of Shineway, for US$150 million, sources reported, citing an insider familiar with the matter as saying.

Reportedly, Asia Special Situation Group of Goldman Sachs, one of Goldman Sachs's best and fastest profit streams in the Asian market, inked an agreement last week to sell part of its shareholding in Shineway to CDH.

It is estimated that Goldman Sachs will reap fives times its investment in 2006 from the sale. After the deal, Goldman Sachs' stake in the Chinese meat processor will decline to approximately 5.5%.

However, Shineway refused to comment on the deal and said the company had no official announcement regarding the share transaction.

In 2006, Goldman Sachs and CDH jointly invested US$250 million in Shineway, and reportedly Goldman Sachs paid about US$75 million for a stake in Shineway.

Goldman Sachs also owns a 13% stake in Hong Kong-listed China Yurun Food Group Ltd<1068>, the biggest rival of Shineway in the country.

Shares of Shineway's listed unit, Henan Shuanghui Investment and Development Co<000895>, fell 0.97% to close at RMB 47.86 on Thursday.