Campbell Soup Co
Campbell, the world's largest soup company, started selling soup in China in 2007 but has been looking for ways to expand the business in the world's most populous country, where most people still eat homemade soup.
Under an agreement announced on Wednesday, Campbell will own 60 percent of the Campbell Swire joint venture.
Campbell has seen its core U.S. soup market hurt in the past several quarters as competitors have offered promotional deals and consumers have focused on finding the lowest price for soup and other convenient meals.
In the latest quarter, Campbell's ready-to-serve soup sales fell 13 percent, hurt by stepped-up promotions by rival brand Progresso, owned by General Mills Inc
Campbell has said it plans to focus in the United States more on its units that sell items like V8 juices and Pepperidge Farm Goldfish crackers.
The company sees the Chinese market as fertile ground for expansion. Campbell and Swire said about 355 billion servings of soup are consumed in China annually. But most of those servings are of homemade soup, and the challenge is to persuade consumers to buy packaged soup.
Hong Kong-based Swire has distributed Campbell's broth in China since it entered the country. Swire's businesses range from bottling Coca-Cola
Campbell shares were up 20 cents at $34.75 in morning trading.
(Reporting by Brad Dorfman and Martinne Geller, editing by Maureen Bavdek, John Wallace, Dave Zimmerman)