HJ Heinz Company Chief Executive William Johnson addresses the audience at the annual shareholder's meeting in Pittsburgh, Pennsylvania, in this August 2006 file photo. Heinz has inked a deal to sell its 49 per cent share of a Zimbabwe cooking oil company. - Reuters

Zimbabwe has taken over U.S. food group H.J. Heinz Company'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 US$6.8 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 Zimbabwe's parliament.

Mugabe's government, which is struggling with a deepening economic recession - marked by inflation of over 7,600 per cent, soaring poverty and chronic food and fuel shortages - has accused some businesses of halting production to undermine the economy.

-Reuters