HONG KONG, June 18 (Reuters) – China Mengniu Dairy Co Ltd signed a second takeover deal in a month on Tuesday, offering to buy Carlyle-backed Yashili International Holdings Ltd in a deal worth about HK$12.5 billion ($1.6 billion) as part of a plan to expand its milk powder business.
The deal with Yashili (1230.HK), which sources all of its products from New Zealand, marks the latest step by China’s milk industry to consolidate the market after several tainted milk scandals tarnished the fragmented sector.
It is also the second time since May that a U.S. private equity firm has exited a lucrative investment in a Chinese milk company.
Mengniu is offering HK$3.50 in cash to Yashili’s shareholders, which includes the Carlyle Group and Yashili’s chairman. The buyer is offering a second option of HK2.82 in cash per share and 0.681 per share in a Mengniu-backed acquisition holding company, according to a statement to the Hong Kong stock exchange.
For Mengniu, which also recently announced an investment by French dairy group Danone, the purchase will strengthen its foothold in the milk powder segment, which currently contributes less than 2 percent of its revenues.
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China’s Mengniu adds another deal with offer for Carlyle’s Yashili
