Danone to buy 25 pct of Chinese dairy firm Yashili for $550 mln

Yashili International Holdings

31/10/2014 24:49

SHANGHAI, Oct 31 (Reuters) - Dairy giant Danone SA  DANO.PA  
will buy a 25 percent stake in Chinese milk powder maker Yashili 
International Holdings Ltd  1230.HK  for $550 million as it 
looks to increase its footprint in China's fast-growing dairy 
sector, the French firm said on Friday. 
    Danone will pay HK$3.7 per share in a private placement 
deal. The tie-up will focus on China's infant milk formula 
market, set to hit $17.8 billion this year, according to 
Euromonitor. 
    China Mengniu Dairy Co Ltd  2319.HK , Yashili's majority 
shareholder, will see its stake diluted to 51.04 percent from 
68.05 percent, according to a company filing to the Hong Kong 
stock exchange on Friday. 
    Mengniu, in which Danone holds a near 10 percent stake, 
bought Yashili in a deal worth about HK$12.5 billion last year 
as part of a plan to expand its milk powder business. 
    "We are today strengthening the winning team formed by 
Danone and Mengniu by acquiring an equity stake in Yashili - 
combining Mengniu's wide-reaching network in China with Danone's 
international expertise in infant milk products," Danone's CEO 
Emmanuel Faber said in a statement. 
    The deal, expected to be finalized in the coming months, 
still needs shareholder approval. 
    Trading in Yashili shares, which was suspended on Oct. 29, 
will resume on Friday. 
 
(1 US dollar = 0.7934 euro) 
 
 (Reporting by Adam Jourdan in Shanghai and Donny Kwok in Hong 
Kong; Editing by Edwina Gibbs) 
 ((adam.jourdan@thomsonreuters.com; +86 21 6104 1778; Reuters 
Messaging: adam.jourdan.thomsonreuters.com@reuters.net)) 
 
Keywords: YASHILI DANONE/M&A