Nov 26, 2019 (China Knowledge) - China’s dairy products manufacturer China Mengniu Dairy has reached an agreement with Japanese beverage firm Kirin Holdings for the acquisition of Kirin’s Australian subsidiary Lion Dairy & Drinks for around JPY 45.6 bln (USD 419 mln).
Following the deal, Mengniu Diary will acquire Lion Dairy’s milk, yogurt and juice businesses. The beer, wine and spirits businesses of Lion Dairy’s will continue to be owned by Kirin Holdings.
Based in Inner Mongolia, Mengniu Dairy is one of China’s leading manufacturers of dairy products. With the acquisition of Lion Dairy, the company is set to takeover Australia's second-largest milk processor with an estimated 19% market share in the milk processing market.
According to Kirin, Lion Dairy is expected to record a revenue of JPY 129.9 bln (USD 1.19 bln) in 2019.
This deal is part of efforts by Mengniu Dairy to expand its international footprint on the backdrop of growing demand of infant milk formula by China’s growing middle class household. The diary giant has also increased its focus in setting up overseas plants; and, at the same time, Chinese authorities also encourage greater investments by foreign dairy companies into China.
Earlier in Sep, Mengniu Diary agreed to acquire Australian organic milk powder firm Bellamy's Australia for AUD 1.50 bln (USD 1.02 bln).
The latest deal between Mengniu Dairy and Kirin Holdings is expected to close in H1 next year.
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