(Yicai Global) Sept. 11 -- CITIC Group Corp Ltd. and Beijing capital Agribusiness Group (Sunlon) will acquire 100 percent stake in Cherry Valley Farms Ltd., a British firm specializing in poultry services, about eight months after their successful joint bid for McDonald's franchise in the Chinese mainland and Hong Kong, the pair announced today.  

CITIC Group became a shareholder of Beijing Capital Agribusiness Group ('Sunlon') after a CNY2 billion (USD306 million) equity investment in the firm via one of its subsidiaries early this year.

The target company is a leading breeder of 'Pekin duck,' a patented product descended from Beijing duck, better known as Peking duck. The deal will bring the native Chinese breed back to China, and it will also mark the first cross-border acquisition in country's animal farming industry.

Breeding is one of the most lucrative businesses in the duck market, and has a direct influence on the quality and sales of duck products, a source at Sunlon told Yicai Global. The company and CITIC Group made the joint bid as soon as Cherry Valley Farms was put on the market, and won the deal in the end.

The companies did not disclose the price of the acquisition, but a source connected with Sunlon estimated the price to be about CNY1.5 billion.

The firms will acquire the complete patented Pekin duck gene technology, Yicai Global reporter learned. Sunlon plans to move the breeding team from the UK to China, and further consolidate the meat duck industry chain at source using its generic research and product development strengths.

Cherry Valley ducks have a short growth cycle that lasts only about 30 days, Sunlon's data show. As a result, the product gained 85 percent market penetration last year despite its relatively late entry into the market in the 1990s. The British company's patented grandparent-generation duck breeding technology has enabled to maintain a gross margin of above 60 percent.

Cherry Valley Farms created the 'Cherry Valley duck' variety by combining the genes of Peking duck and local varieties in the 1950s, public information shows. Cherry Valley ducks are still known as 'Pekin ducks' in Western countries today, and its global market share stood at over 75 percent last year.