Dairy giant China Mengniu Dairy Co. buys Lion Dairy and Drinks for a little over US$400 to include in its latest foray into the continent.
The deal is expected to close in the first half of 2020. Kirin will keep Lion’s beer, wine and spirits business while Mengniu will acquire Lion’s milk, yogurt and juice products.
It has been seen that China’s appetite for milk is seen to have been grown recently that’s why Mengniu has been eyeing such overseas acquisitions following its deal in September with Bellamy’s Australia Ltd. Such undertakings made them one of the fastest growing segments of the dairy market.
Since the milk scandal in 2008, China has been looking into restoring confidence in this particular industry again. It can be remembered that the unfortunate event took away six lives of children and have poisoned 300,000 others.
Earlier this year, it will support domestic dairy producers in acquiring or setting up overseas bases in the country. In addition, they will tighten regulations on milk powder imports and online sales platform.
Kirin sold its Australian cheese business to Canada’s Saputo Inc. earlier this year just like Lion Dairy and Drink.
Kirin expressed its plans of seeking growth in Australia and New Zealand through high-margin alcoholic beverage and premium non-alcoholic drinks. It is consciously gearing towards craft beer and personal well being products.
Over the next three years, Kirin is revealed to have set aside 300 billion yen to acquire companies over the next three years. News has it that Kirin has agreed to buy one of the world’s largest independent breweries and makers of Fat Tire Ale, New Belgium Brewing.
Kirin shares climbed as much as 0.6% in early trading in Tokyo on Monday. China Mengniu added as much as 0.5% in Hong Kong.