China Mengniu Dairy Co Ltd has signed a deal to buy Yashili International Holdings Ltd for over HK$11 billion ($1.42 billion), marking the most costly merger in China’s domestic dairy sector, China Securities Journal reported Wednesday [19 June 2013]. The purchase on Tuesday afternoon was deemed part of the restructuring of the Chinese dairy industry that is being promoted by the central government…Full-text article: China Daily (Africa) June 2013

Mengniu is buying a 75% stake in Yashili International Holdings Ltd from chairman Zhang Lidian’s family and Carlyle Group. The move will help the Inner Mongolian producer catch up with domestic rivals in the baby milk formula market, which is estimated to be worth more than 50 billion yuan ($8.15 billion), according to Song Liang, a dairy industry analyst at the Distribution Productivity Promotion Center of China Commerce…Full-text article: China Daily (USA) June 2013

Key point

  • As of May 2013, China had 127 baby milk-producing enterprises with a total production capacity of 600,000 tons. Only three of these enterprises had an individual annual production capacity of at least 30,000 tons.

ChinaAg Comment

  • China Mengniu Dairy Company Ltd: Founded in 1999 in Inner Mongolia, Mengniu Dairy is one of the leading dairy product manufacturers in China, with “MENGNIU” as its core brand.
  • Yashili International Holdings Ltd.: Founded in 1983 and headquartered Guangdong province, the company is one of the leaders in the pediatric milk formula industry, as well as having a leading position in the soymilk powder market in China.

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