Mengniu reveals keen interest
By Jin Jing |
October 25, 2011, Tuesday
|
Print Edition
Print Edition
CHINA'S Mengniu Dairy Co yesterday expressed for the first time publicly its keen interest to bid for Pfizer Inc's infant nutrition business if the giant United States pharmaceutical company put the assets up for sale.
"If Pfizer finally decides to dispose of its infant nutrition business, Mengniu will closely monitor the development as other dairy producers would," the nation's largest dairy firm said in a statement to the Hong Kong stock exchange yesterday.
"But so far, the company is not in any direct negotiations with Pfizer and currently has no concrete arrangement or plan regarding the bid," the statement added.
Mengniu's statement was in response to earlier media reports which said the milk and yogurt maker was talking with UBS over a bid.
Shares of Mengniu fell 1.7 percent to HK$25.75 (US$3.31) yesterday, valuing the company at just over half of the US$10 billion estimated for Pfizer's baby nutrition business.
Pfizer has been trying to sell or spin off the infant nutrition business since July to focus on its core business.
Inner Mongolia-based Mengniu's interest in Pfizer's baby nutrition would place the Chinese dairy firm in competition with Danone SA, Nestle SA, Mead Johnson Nutrition Co, Heinz Co and Abbot Laboratories, which are all eying the possible sale.
"Infant formula has been a segment that is attractive for China's dairy firms," said Zhang Yun, an analyst at Huatai Securities. "Mengniu lags its biggest rival Yili in this niche market."
Buying an international brand may help Mengniu to regain the consumer trust in the baby nutrition sector following the melamine scandal in 2008. Melamine, an industrial chemical, was found in products made by Chinese dairy firms, including Mengniu, Yili and Bright Dairy, causing the deaths of at least six children and sickened about 300,000 others.
"If Pfizer finally decides to dispose of its infant nutrition business, Mengniu will closely monitor the development as other dairy producers would," the nation's largest dairy firm said in a statement to the Hong Kong stock exchange yesterday.
"But so far, the company is not in any direct negotiations with Pfizer and currently has no concrete arrangement or plan regarding the bid," the statement added.
Mengniu's statement was in response to earlier media reports which said the milk and yogurt maker was talking with UBS over a bid.
Shares of Mengniu fell 1.7 percent to HK$25.75 (US$3.31) yesterday, valuing the company at just over half of the US$10 billion estimated for Pfizer's baby nutrition business.
Pfizer has been trying to sell or spin off the infant nutrition business since July to focus on its core business.
Inner Mongolia-based Mengniu's interest in Pfizer's baby nutrition would place the Chinese dairy firm in competition with Danone SA, Nestle SA, Mead Johnson Nutrition Co, Heinz Co and Abbot Laboratories, which are all eying the possible sale.
"Infant formula has been a segment that is attractive for China's dairy firms," said Zhang Yun, an analyst at Huatai Securities. "Mengniu lags its biggest rival Yili in this niche market."
Buying an international brand may help Mengniu to regain the consumer trust in the baby nutrition sector following the melamine scandal in 2008. Melamine, an industrial chemical, was found in products made by Chinese dairy firms, including Mengniu, Yili and Bright Dairy, causing the deaths of at least six children and sickened about 300,000 others.
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