Bright Food Group Co., the dairy and consumer-products group backed by the Shanghai government, said it’s considering an acquisition of Israel’s Tnuva Food Industries Ltd. as the Chinese company expands overseas.

Bright Food is in “preliminary” acquisition talks on Tnuva, the Chinese company’s spokesman Pan Jianjun said by phone today, without specifying the size of the stake it might buy.

The company has been seeking acquisitions overseas and bought a 60 percent stake last year in British cereal maker Weetabix Ltd. from private-equity firm Lion Capital LLP. Rivals including China Mengniu Dairy Co. have also sought deals or foreign partnerships after a series of safety scandals hurt consumer confidence in local brands.

“Bright Food needs to speed up on overseas acquisitions to improve the sourcing of raw milk as well as the research and development capacity,” Todd Yang, an analyst at Guosen Securities Co., said by phone today.

Bright, which has retail outlets across China and whose brands include Big White Rabbit candy and Aquarius drinking water, also operates tea, dairy and rice farms.

Tnuva is the largest food manufacturer and distributor in Israel, according to the website of private-equity firm Apax Partners, which has invested in the company. It owns seven of the 10 most known food brands in Israel and accounts for more than 14 percent of shelf space in supermarkets, the website says.

Tnuva was formed more than 80 years ago as an agricultural cooperative of 620 farming communities across the country, who were also the company’s suppliers of raw milk and produce, according to Apax. Members of the co-operative in 2007 approved the sale of a majority stake in Tnuva to Apax at a price that valued the company at $1.025 billion at the time.

International Deals

Both parties are looking at the possibility of a tie-up, Pan said, adding that there’s no set timetable or budget for a deal. The Chinese food maker lost out on a stake in yogurt maker Yoplait in 2011 and was outbid by Wilmar International Ltd. for CSR Ltd.’s sugar unit in 2010.

Bright competitor China Mengniu, the country’s largest dairy producer, in August reported a 16 percent increase in first-half earnings as tie-ups with foreign milk producers helped reassure customers its products were safe. Danone, the French owner of Activia yogurt and Evian water, said in May it would spend about 325 million euros ($428 million) to form a joint venture with Mengniu and invest in the company.

Pork producer Shuanghui International Holdings Ltd. agreed to acquire Smithfield Foods Inc. for about $4.72 billion in May.

Tnuva couldn’t be immediately reached for comment outside regular office hours. In a Sept. 2 statement to the Tel Aviv stock exchange, Tnuva said Apax gets offers for a stake in the company from time to time and Apax has indicated offers haven’t led to negotiations.

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