April 25, 2013

China Modern Dairy has denied a takeover by "a third party" - assumed to be dairy product manufacturer, Mengniu, but has confirmed that talks are ongoing with the unnamed company concerning "possible disposal of certain assets."

"No material terms concerning the possible disposal has been agreed and the company has not entered into any definitive agreement in relation to the matter," China Modern Dairy said.

Mengniu had also responded to "recent market rumours" surrounding the acquisition of a milk producer.

"The board confirms that there have been informal talks between Mengniu and another company regarding a possible acquisition of certain assets," according to a statement by Mengniu.

"The board re-iterates that such talks are very preliminary and the company has not made any decision regarding the alleged acquisition."

In August 2012, China Modern Dairy denied knowledge of talks between COFCO Corporation and KKR - the largest shareholders of Mengniu and China Modern Dairy respectively.

In January 2013, reports emerged that discussions regarding the acquisition of China Modern Dairy by Mengniu had begun.