April 9, 2009

 

Sanyuan buys 95 percent stake in Sanlu Shandong

Beijing-based Sanyuan Group on Thursday successfully bought 95 percent stake in the Sanlu (Shandong) dairy company owned by Sanlu Group.

 

The shares were bought for RMB49 million (US$7.2 million) at an auction, despite Sanyuan's earlier claims that it would not compete in the auction of Sanlu Group's other assets.

 

Sanyuan beat competition from four other companies at the auction, which had an opening bid of RMB33 million (US$4.8 million). A Sanyuan representative said the company is happy with the result.

 

Sanlu (Shandong), which was established in 2006, specialises in producing and selling liquid milk products. The company changed its name to Shandong Ecological Pasture Co Ltd. in October last year.

 

Sanyuan Group successfully bought Sanlu's core assets with RMB616.5 million (US$90.2 million) on March 4.

 

Sanlu had been China's leading milk powder seller for 15 years until the melamine scandal broke in September last year. The Group's revenue hit RMB10 billion (US$1.4 billion) in 2007, while Sanyuan's revenue was RMB1 billion (US$146.3 million).