(Yicai Global) July 26 -- Shares in China's Natural Food International Holding have surged today after it revealed that beverages giant PepsiCo would invest USD131 million to take a 26 percent stake in the health food maker.

The Shenzhen-based firm's stock [HKG:1837] opened up more than 29 percent higher at HKD2.41 (31 US cents) this morning before simmering to HKD2.09 by the lunch break, up 16 percent.

PepsiCo plans to pay HKD1.8 per share, on par with yesterday's closing price, to buy the shares from minority shareholders and become Natural Food's second-largest shareholder behind founder Gui Changqing, who holds around 42 percent.

Bolstered by Natural Food's unique, data-driven and direct-to-consumer business model and its locally suited product range, PepsiCo will use the investment to accelerate its mission to become China's leading consumer-centered food and beverage firm, the buyer said.

Natural Food listed in Hong Kong last year and is China's second-largest natural health food firm, with a focus on cereal-based nutritional powders, according to Frost & Sullivan. Its sales reached CNY1.8 billion (USD240 million) last year and net profit hit CNY105 million (USD15.3 million).

Post investment, the pair will work together along the entire value chain to help enhance Natural Food's brand influence, said Gui, who is also chairman.

Editor: James Boynton