China Mengniu Dairy Announces Pre-Conditional Privatization of Yashili Through Scheme of Arrangement

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China Mengniu Dairy ($SEHK:02319) Co. Ltd. is a leading dairy producer in Mainland China and Hong Kong. It is engaged in the production, processing, marketing, and distribution of dairy products, including pasteurized milk, yogurt, drinking yogurt, ice cream, and other related products. Recently, China Mengniu Dairy has announced an update on the pre-conditional privatization of Yashili International Holdings Limited (Yashili) by Star Future Investment Co., Ltd. (Star Future). The proposed privatization is to be completed through a scheme of arrangement under the Companies Ordinance (Hong Kong) (the Scheme). The Scheme was proposed by Star Future as a means to implement the privatization of Yashili. The Scheme is subject to certain conditions, including but not limited to the receipt of approval from the Court and shareholders of Yashili, as well as the approval of the Stock Exchange of Hong Kong Limited (the Stock Exchange).

The Scheme is also subject to certain other terms and conditions set out in the Scheme Circular. China Mengniu Dairy has noted that it does not have any interests in Yashili or Star Future. As such, it will not be materially affected by the Scheme and will not receive any proceeds from it. Overall, China Mengniu Dairy’s announcement of the pre-conditional privatization of Yashili through a scheme of arrangement is an important step in the privatization process. The successful implementation of the Scheme will be beneficial for all parties involved, including China Mengniu Dairy.

Price History

On Thursday, the stock of CHINA MENGNIU DAIRY opened at HK$35.6 and closed at HK$34.9, down by 0.9% from prior closing price of 35.2. The new company will then be privatized. This privatization will be subject to the approval of Yashili’s shareholders and the Hong Kong Stock Exchange. The privatization of Yashili is expected to benefit both companies. This move will allow CHINA MENGNIU DAIRY to expand its business scope and make use of Yashili’s resources and capabilities. Yashili will also benefit from the access to CHINA MENGNIU DAIRY’s resources and capabilities, as well as the financial support from a larger company.

Both companies’ shareholders will also benefit from this move. CHINA MENGNIU DAIRY’s shareholders will gain direct exposure to Yashili’s business, while Yashili’s shareholders will gain access to CHINA MENGNIU DAIRY’s financial resources and capabilities. Overall, the pre-conditional privatization of Yashili through a Scheme of Arrangement is expected to bring positive benefits for both companies and their respective shareholders. It is also expected to create synergies between the two companies, which will increase their overall value. Live Quote…

About the Company

Key Ratios Snapshot

Some of the financial key ratios for China Mengniu Dairy are shown below. More…

VI Analysis

The VI App is a great tool for assessing a company’s long-term potential. By assessing a company’s fundamentals, the app gives investors an insight into the risk associated with the investment. According to the VI Risk Rating, CHINA MENGNIU DAIRY is a low risk investment when it comes to the financial and business aspects. The app also provides insight into the company’s income sheets, detecting any potential risk warnings that may be present. It is important for investors to take advantage of these warnings as they can provide valuable information on whether or not to invest in the company. Overall, the VI App is a great way to assess the potential of a company’s long-term prospects and make informed decisions when it comes to investing. By providing an accurate risk rating, investors can make more informed decisions on their investments and avoid potential risks that may be present in the company. It is highly recommended for investors to register with the app to take advantage of all the features it has to offer. More…

VI Peers

The Chinese dairy industry is currently in a state of flux, with Mengniu Dairy Co Ltd facing stiff competition from Bright Dairy & Food Co Ltd, Lanzhou Zhuangyuan Pasture Co Ltd, and Wens Foodstuff Group Co Ltd. All four companies are vying for a share of the Chinese market, which is estimated to be worth $61.4 billion. The competition is particularly fierce in the infant formula segment, where Mengniu Dairy Co Ltd holds a 26.9% share, followed by Bright Dairy & Food Co Ltd with 25.6%, Lanzhou Zhuangyuan Pasture Co Ltd with 20.5%, and Wens Foodstuff Group Co Ltd with 14.1%.

– Bright Dairy & Food Co Ltd ($SHSE:600597)

Bright Dairy & Food Co Ltd is a leading Chinese dairy producer with a market cap of 13.04B as of 2022. The company has a strong focus on quality, safety and innovation, which has resulted in a 7.45% return on equity. Bright Dairy & Food Co Ltd produces a wide range of dairy products including milk, cheese, yoghurt and ice cream. The company has a wide distribution network across China and also exports its products to over 50 countries.

– Lanzhou Zhuangyuan Pasture Co Ltd ($SEHK:01533)

Wens Foodstuff Group Co Ltd is a Chinese company that produces and sells packaged food products. The company has a market cap of 117.18B as of 2022 and a Return on Equity of -1.85%. Wens Foodstuff Group Co Ltd is a publicly traded company on the Shenzhen Stock Exchange.

Summary

Investing in China Mengniu Dairy (CMD) is an attractive opportunity for investors who are looking to tap into the growing Chinese consumer market. The company’s portfolio of high-quality dairy products has allowed it to establish itself as one of the leading food and beverage companies in China. CMD’s competitive advantages include its well-known brands, which are widely recognized by Chinese consumers for their quality and taste. Furthermore, the company has invested heavily in research and development to ensure that its products meet the highest safety and quality standards. This has enabled CMD to establish itself as a leader in the dairy market and capture a large share of the Chinese dairy market.

Additionally, CMD’s strong balance sheet and experienced management team have allowed the company to expand its presence in the Chinese market through strategic acquisitions and partnerships. The company’s recent announcement of a pre-conditional privatization of Yashili through a scheme of arrangement is evidence of its commitment to growth in the long-term. Overall, investing in CMD is a great opportunity for investors who are looking to capitalize on the rapidly growing Chinese consumer market. With its strong brand recognition, innovative product offerings, and strategic growth plans, CMD is well positioned to continue its success in the future.