Temasek-led group buys S$265m stake in milk powder maker

Published: 4:02 AM, November 12, 2013
Updated: 4:00 AM, November 13, 2013

HONG KONG — A group of investors led by Singapore investment giant Temasek Holdings bought a HK$1.65 billion (S$265 million) stake in Yashili International, sending shares of the milk powder producer soaring yesterday after its parent sold down stock to meet Hong Kong listing requirements.

The deal took place as China Mengniu Dairy was forced to reduce its stake after it failed to buy enough shares of Yashili to force a delisting of the company.

The Yashili stake sale adds to a slew of mergers, acquisitions and equity market deals in Greater China as companies look to raise funds for expansion to cope with booming demand for everything from raw milk and infant formula to yoghurt and other dairy products.

“The government is trying to push forward industry consolidation, that’s why we’re seeing more acquisitions in this area,” said Ms Jacqueline Ko, an analyst at Kim Eng Securities.

Temasek, through one of its Mauritius subsidiaries, China-focused private equity firm Hopu and three individual investors agreed to buy 471.13 million shares of Yashili from China Mengniu Dairy for HK$3.50 each, the dairy companies said in a securities filing.

Temasek bought 47 per cent of the Yashili shares, with Hopu taking 38 per cent. The three individual investors bought the remaining 15 per cent through British Virgin Islands holding companies, according to the filing, which did not name them. REUTERS