World's biggest food and drink company Nestle took another big step into the Chinese market on Monday with the announcement that it is to buy a majority stake in candy maker Hsu Fu Chi for Singapore $2.1 billion ($1.7 billion).

The Swiss manufacturer of Nescafe coffee, KitKat bars and Dreyer's ice cream, said it would acquire 60 per cent of shares in Singapore-listed Hsu Fu Chi, which had sales of almost $800 million last year. The Hsu family will retain the remaining 40 per cent stake, with current CEO and Chairman Hsu Chen continuing in those roles.

“This proposed partnership will greatly reinforce our presence in China,” Nestle CEO Paul Bulcke said in a statement.

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