a级毛片av无码,久久精品人人爽人人爽,国产r级在线播放,国产在线高清一区二区

Economy

Markets

Industries

Insights

Reports

Events

COFCO, Hopu to invest in Mengniu Dairy

(Agencies)
Updated: 2009-07-07 07:55

Mengniu milk products at a supermarket in Beijing. Company sales fell 20 percent during the first five months of this year. [CFP]

China Mengniu Dairy Co, the nation's biggest maker of liquid milk, said COFCO (Hong Kong) Ltd and Hopu Investment Management Co will buy a 20 percent stake, helping to boost its capital and fund growth.

COFCO, part of China's biggest grain trader, and Hopu will spend HK$6.12 billion ($790 million) to acquire the stake from the company and shareholders, Mengniu said in a statement to the Hong Kong stock exchange yesterday. The investors will be the biggest stakeholders in Mengniu.

Mengniu was one of the 22 dairy producers found to have sold products containing melamine in a scandal that killed six children and sickened 300,000 in China last year. The government on July 3 said it will encourage mergers in the dairy industry to improve quality.

"Mengniu could use the money to develop its new product lines like ice cream, which has been doing well," said Shaun Rein, Shanghai-based managing director of China Market Research Group. "They could also improve product distribution into smaller cities, where milk consumption isn't very high."

Related readings:  Mengniu Dairy slips into the red  Mengniu plans more raw milk bases  Mengniu Jan-May sales rebound markedly  China milk scandal dragged Yili Group into losses

Mengniu, halted in Hong Kong yesterday pending the announcement, traded at HK$19.10 on July 3. The milk producer's shares have climbed 89 percent this year after falling 65 percent in 2008.

The shares will be sold at HK$17.60 apiece to a special purpose vehicle in which COFCO will own 70 percent, with the remainder held by Hopu, according to the statement. Hopu is a $2.5 billion fund run by Goldman Sachs Group Inc's China partner Fang Fenglei.

Capital Structure

"The proceeds from the share subscription would further strengthen the company's capital structure and financial position to support its future growth and expansion," Mengniu said. Mengniu will sell 173.8 million new shares.

Hopu and COFCO will also buy 173.8 million shares from Jinniu Milk Industry Ltd, Yinniu Milk Industry Ltd, and Inner Mongolia Laoniu Community Welfare Development Association.

COFCO Ltd, the Beijing-based parent of COFCO (Hong Kong), said the purchase will help the diversification of its food business, according to a statement on its website.

COFCO is also in talks to buy stakes held by some minority shareholders in Inner Mongolia Mengniu Dairy (Group) Co, Mengniu said. The unit is 93.3 percent held by Mengniu.

Mengniu would be the fourth investment for Hopu, which raised funds from investors including Goldman Sachs and Temasek Holdings Pte last year. Hopu bought part of Royal Bank of Scotland Group Plc's stake in Bank of China in January.

China, the world's third-largest milk producer, is pushing dairy farms to meet higher standards after melamine, an industrial chemical used to make plastics and tan leather, was found in infant milk powder and other dairy products last year.

Some suppliers had added the chemical to diluted milk to make the protein content appear higher than it is, the Chinese government said.