Malaysia's largest manufacturer of candies and sweets, Khee San Bhd (KSB), is in talks to buy the pet food sales and distribution business of Wah Kong Corp. Sdn Bhd (WKC).

Khee San is particularly interested in acquiring stakes in four fast-moving consumer goods (FMCG) subsidiaries of Wah Kong, namely Momentum Strike Sdn Bhd, Yew Fatt Marketing Sdn Bhd, YFM Distributors Sdn Bhd and HC Hin Marketing Sdn Bhd.

Momentum Strike Sdn Bhd covers Malaysia and Brunei. It is the national distributor of Pet World Marketing Sdn. Bhd, which was established in 2006 and makes Prodiet cat food (one of the leading cat food brands in Malaysia) and ProBalance dog food (a line of both wet and dry products).

Businesses will be a boon to each other

In a statement, Khee San said the businesses of the FMCG companies are expected to be complementary and synergistic to its existing business in the manufacturing and trading of confectionery and other related food products. It didn't say, however, if the company will also eventually engage in pet food production and distribution or if it will carry a new pet food brand.

Any buyout talk would be subject to shareholders’ and regulatory approval.

Khee San said if the negotiations are successful and the share sale turns unconditional, “Wah Kong will become a substantial shareholder of Khee San. And depending on the purchase consideration, Wah Kong may then be required to extend a mandatory takeover offer to acquire the remaining shares in Khee San not already held by itself and persons acting in concert, at the indicative offer price of [MYR 0.33, US$.08] per share.”

Khee San has been in business for more than 50 years, creating all sorts of candy and confectionery products like the Fruit Plus chewy candies that are beloved by Malaysians and the Gollypop lollipop brand.