Bright Dairy & Food, China’s third-largest milk producer by market value, plans to purchase raw-milk supply operations from its state-owned parent.
The company will acquire cattle-breeding and raw-milk businesses under its parent’s Shanghai Dairy Group unit, Pan Jianjun, a spokesman for the group said by phone. The deal would help Bright Food Group consolidate more dairy operations under its main listed arm, Pan said.
Bright Food Group, controlled by the Shanghai government, joins state-owned Cofco in trying to boost competitiveness by merging some of its disparate businesses. The move would help Bright Dairy ensure a reliable raw milk supply as it seeks to boost beverage sales in Asia’s largest economy.
Shanghai Dairy Group’s cattle-breeding operations include 24 dairy farms with more than 35,000 milk cows, according to its website. Calls to Bright Dairy’s headquarters in Shanghai weren’t answered. A public-relations representative for Shanghai Dairy also didn’t answer phone calls seeking comment.
Earlier this month, Bright Dairy said that it will seek as much as 9 billion yuan ($1.45 billion) in a private share placement to buy its parent’s controlling stake in Israeli dairy producer Tnuva Food Industries Ltd. Last month, Bright Food Group said that it would merge with edible-oil-maker Shanghai Liangyou Group, which is also controlled by the municipal government.
News by Bloomberg, edited by ESM
