It appears that the talk about China’s Bright Food Group Co. wanting to buy US nutritional retailer GNC Holdings Inc. is about to prove true. The Wall Street Journal is citing “people familiar with the matter” as saying that Bright Food will offer between $2.5 and $3 billion for GNC.  If the deal goes through at that level, it will be the largest takeover by a Chinese company of a US firm, at least doubling the price paid by Lenovo for the PC business of IBM Corp. (NYSE: IBM) in 2004.

According to Bloomberg, Blackstone Group LP (NYSE: BX) is “teaming up” with the Chinese to make the deal happen. That seems a little odd, given that Blackstone and Bright Food have been unable to reach a deal for United Biscuits, a company that Bright Food wants to buy from Blackstone and private equity firm PAI Partners.

GNC is owned by private equity firm Ares Management LLC and the investment division of the Ontario Teachers’ Pension Plan, which bought the company in 2007 for $1.65 billion from Apollo Management LP. Apollo failed twice to take GNC public.

GNC sells its products through a global network of about 7,100 stores, of which 4,800 are located in the US with the rest operating as franchises in 48 international markets. Earlier this year, Bright Food and GNC had agreed to form a joint venture to help GNC gain entry to the Chinese market.

Bright Food is majority-owned by the municipal government of Shanghai, which holds just over 50% of the company. Shanghai DaSheng Holdings Co. Ltd. holds just over 40%, and four other Chinese companies hold the rest. Four Bright Food subsidiaries are listed on the Shanghai stock exchange.

If the deal is made, it would need approval from the federal government’s Committee on Foreign Investment in the United States. But if a PC business jumped that hurdle, there’s no reason to think a vitamin and nutritional supplement business won’t. Unless of course the US government fears that the Chinese will bulk up and take over the NFL too.

Paul Ausick

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