Danone to buy 25% of Chinese milk formula maker Yashili

By Ding Yining | October 31, 2014, Friday |

Online Edition

French food and nutritional products company Danone said today it is to invest 437 million euros for a stake in Chinese infant milk formula maker Yashili International to drive income on the booming demand for milk powder in China.

Through a private placement at HK$3.7 (46 US cents) per share, Danone would hold a 25 percent stake in Yashili, as it extends the strategic alliance with Mengniu established last year.

Mengniu would remain Yashili's controlling shareholder with a 51 percent stake after Danone's acquisition, which is expected to be finalized in a few months after gaining approval from shareholders and regulatory authorities, Danone said in a statement.

The French company last year raised its stake in Mengniu to 9.9 percent with an investment of US$665 million to strengthen its foothold in the dairy segment.

“We are combining Mengniu’s wide-reaching network in China with Danone’s international expertise in infant milk products and we're confident to grow all of our brands in the Chinese market," Danone CEO Emmanuel Faber said in a statement.

Danone, Mengniu and Yashili intend to expand their cooperation in the infant formula business and to study the possibility of an investment in Danone's subsidiary Dumex China with a similar equity structure.

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Danone to buy 25% of Chinese milk formula maker Yashili

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