COFCO Limited (COFCO), China's largest food product enterprise, announced on July 6 that it will buy Meng Niu Dairy (Meng Niu) shares worth as much as 6.1 billion HKD, marking the largest deal in the domestic food industry.
Reporters learned that COFCO will jointly invest 6.1 billion HKD with Hopu Investment Management (Hopu), a private equity fund with investment from Temasek and Goldman Sachs,to acquire 20 percent of Meng Niu shares at the price of 17.6 HKD per share. This will realize cooperation between COFCO's existing food industry businesses and dairy businesses in terms of consumer goods branding, and significantly enhance the overall competitiveness of China's food products in international markets.
Reporters learned that COFCO and Hopu will establish the joint venture, with COFCO holding 70 percent of the shares. Not only will the joint venture purchase new shares issued by Meng Niu, but it will also purchase existing shares from current shareholders. Once the joint venture completes the acquisitions, it will hold 20 percent of the expanded Meng Niu, becoming its largest shareholder.
As a strategic investor and a long-term shareholder, COFCO will take 3 non-executive seats in Meng Niu's future board of 11 directors. COFCO will not participate in Meng Niu's operation and management, change its existing management team or adjust its current strategic direction.
By People's Daily Online