Zimbabwe has taken over US food group HJ Heinz Co's 49 per cent stake in the African nation's leading cooking oil maker, the first major move in a drive by President Robert Mugabe to control foreign-owned firms.
Agro-processing company Cotton Company of Zimbabwe (Cottco), a state enterprise until its privatisation in 1997, said it had bought Heinz's stake in Olivine Industries in a deal facilitated by a government-owned investment company.
Zimbabwe's official media announced the $US6.8 million ($NZ9.87 million) transaction on Monday.
Olivine commercial director Phineas Chingono confirmed the takeover but told Reuters only government officials could give details. The deal - under which management of the company will be handed over to the state - is the first significant takeover of a foreign firm since Mugabe's government vowed to turn over majority control of foreign assets, including those belonging to banks and mines, to Zimbabweans.
A law to do so is under consideration in Zimbawe's parliament.
Mugabe's government, which is struggling with a deepening economic recession - marked by inflation of over 7600 per cent, soaring poverty and chronic food and fuel shortages - has accused some businesses of halting production to undermine the economy.
Heinz, which makes Ore-Ida potatoes and Smart Ones frozen meals in addition to Heinz ketchup, was one of the first foreign investors in Zimbabwe after the country's independence from Britain in 1980.
In January, Industry and International Trade Minister Obert Mpofu said Heinz had indicated to Zimbabwe's government it was ready to sell its interest in the firm. Mpofu was not immediately available for comment on Monday.
Relations between Olivine and Harare soured in 2006 over charges the firm stopped producing cooking oil after being barred by Washington from buying from white-owned farms that had been seized by Mugabe's government and redistributed to blacks.
Mugabe's government indicated then it was ready to take over Olivine through the state-owned Industrial Development Corporation.
The government retains influence in Cottco through the state-run National Social Security Authority, which is the largest single shareholder in the company.
Zimbabwe's government owned 49 per cent in Olivine before the Heinz deal, in a partnership forged in 1982 under which the US food company was given a contract to manage the business.
The proposed Zimbabwean empowerment law has triggered some corporate deals to ensure compliance, with Old Mutual planning to transfer a 20 per cent stake in its Zimbabwe operations to local staff. Hotel and retail group, Meikles Africa Ltd - one of the oldest enterprises founded during colonial times - also has announced a deal to merge with a black-run financial group.
Some foreign investors and analysts have said the ownership drive could worsen the crisis in Zimbabwe, once one of southern Africa's most prosperous countries.
A June price freeze ordered by Mugabe has worsened food shortages after frenzied buying emptied many shops of basic consumer goods, including cooking oil.
The country's sole leader since independence, 83-year-old Mugabe blames Western sanctions for the crisis.
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