The deal sees Yashili (HK) sell 49% of the share capital of Yashili New Zealand, to DAPH, a member of Danone.
On May 23, Yashili said, it was considering a disposal of a non-controlling interest in certain factory assets, which resulted in the sale to DAPH.
The terms of the sale are yet to be finalized as Yashili said in a statement that, “The consideration, the payment method and the payment schedule shall be determined after arm’s length negotiations and mutual agreement between the parties and shall be set out in the Definitive Agreements.”
It said such definitive agreements may include ‘a share purchase agreement, a shareholders agreement and other documents necessary or desirable to implement the Proposed Transaction.’
Existing relationship
Danone and Yashili already have close ties. In 2016, Yashili New Zealand agreed to sell NZ$18.7m (US$13.2m) of base powder dairy products to Danone.
Danone Asia already owned 25% of Yashili International.
Danone acquired a quarter stake in Yashili for HK$4.39bn (US$559m) in 2014 in a deal that included technology and production improvements for the Chinese company.
Infant milk producer Yashili had listed on the Hong Kong stock exchange in 2010 before Mengniu, China’s largest producer of liquid milk products, acquired a controlling stake in 2013.
Yashili New Zealand Dairy, a joint venture between Yashili and Mengniu established in 2012, invested NZ$220m (US$154.8m) in a dairy plant in Pokeno capable of producing 52,000 tonnes a year of infant formula.
Yashili announced a collaboration at the Pokeno plant in 2015 as part of a wider deal to buy Danone’s Dumex infant formula business.