July 14, 2011

 

COFCO expands stake in Mengniu Dairy

 
 

COFCO Limited, one of the most renowned food makers in China, has increased its holdings in China Mengniu Dairy Co Ltd, according to the company's filing to the Hong Kong bourse.

 

COFCO bought a total of 142 million shares in Mengniu Dairy at an average price of HKD 26.265 (US$3.37) apiece or HKD 3.59 billion (US$432 million) in total on July 11, expanding its holdings in the dairy product maker by 8.12 percentage points to 28.04%.

 

The additional share purchase, according to market observers, is part of COFCO's efforts to consolidate its position as the biggest single shareholder of the Inner Mongolia-based company.

 

COFCO,  together with Hopu Investment Management, spent HKD 6.1 billion (US$783 million) buying a 20% stake in Mengniu Dairy at HKD 17.6 (US$2.26) a share in July 2009, becoming the biggest shareholder of the dairy product maker in what is regarded the biggest deal in the Chinese food industry so far.

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