Yili said in its statement that the stake in the facility was sold for $212,000 (RMB1.4m).
The transaction process
During its eighth board of directors meeting this year, Yili passed the proposal of the transaction, according to the statement. However, the transaction hasn’t yet been approved by the Chinese Ministry of Commerce.
The Inner Mongolia-based livestock company is a subsidiary of Yili, and it was named Youran Livestock (Youran) in August, 2015.
“The transaction does not face any legal barriers or asset restructuring,” Yili stated.
When Youran was established in 2007 with a registered capital of $38m (RMB250bn), Yili paid $15m (RMB100bn), holding a 40% stake of Youran with the remaining 60% held by Yogurt Holding.
“Upon the completion of the transaction, Youran will become a foreign-owned enterprise,” Yili said.
“Yogurt Holding I (HK) Limited will hold Youran’s 100% stake.”
Yili deepening cooperation with Yogurt Holding
In fact, many Chinese economists believe this transaction is a sign of deepening cooperation between Yili and Yogurt Holding.
According to China Economic Net, Yili added Pacific Alliance Group (PAG), one of Asia’s largest alternative investment firms, as their investor to increase capital last year. PAG is also the owner of Yogurt Holding.
“In the future, Yili together with PAG will build an international platform to make the best use of international capital resources,” Yili said.
“The platform will help seek out capital resources to Youran, and further enforce the development of the company’s dairy suppliers.”
This is not the first time Yili has looked for international help to develop its domestic dairy market. A Euromonitor report shows the company opened a R&D center in the Netherlands to focus on dairy farm management, dairy product research and food security.
A spokesperson for Yili had not responded to DairyReporter for comment at time of publication.