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Investing.com -- Oriental Rise Holdings Ltd (NASDAQ:ORIS) stock fell 5% after the Chinese integrated tea supplier announced it has entered into a non-binding letter of intent to acquire two tea distributors in China.
The company plans to acquire 100% of the equity interests in Fujian Daohe Tea Technology Co., Ltd. and Ningde Minji Tea Co., Ltd., both described as leading tea distributors in China. The letter of intent is non-binding, and either party may terminate discussions at any time.
Oriental Rise will now begin comprehensive due diligence on the potential acquisition targets and work toward negotiating a definitive acquisition agreement. The company stated that the potential acquisitions align with its strategy to expand and diversify its portfolio within China’s consumer goods and wellness sectors.
"The signing of this LOI is an exciting step toward strengthening our position as a leading integrated tea supplier in China, the largest tea consumer market in the world," said Dezhi Liu, Chief Executive Officer of Oriental Rise. "Bringing Daohe and Minji into the Oriental Rise family would significantly expand our distribution capabilities, customer base, and supply-chain efficiency, resulting in added value to our business and shareholders."
According to the company, Fujian Daohe is known for its premium tea products and advanced processing technology, while Ningde Minji focuses on tea distribution with nationwide coverage including both online and offline sales channels.
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