DEALS
ZhongLun Advices on Mengniu’s HK$ 12.5 Billion Acquisition of Yashili
ZhongLun Advices on Mengniu’s HK$ 12.5 Billion Acquisition of Yashili
On June 18, 2013, China Mengniu Dairy Company Limited (2319.HK) and Yashili International Holdings Ltd (1230.HK) jointly announced the largest M&A deal to date in China dairy market: Mengniu is offering HK$ 12.457 Billion to acquire all issued Yashili shares.
As the legal advisor of Mengniu, Partner SUN Wei of Zhong Lun Law Firm and his team provided legal services regarding the onshore portion of the deal, which earned accolades from Mengniu and its largest shareholder, COFCO. Mr. SUN’s team was also involved in another high-profile deal recently announced by Mengniu, namely, the joining force with Danone in yogurt business.
According to the announcement, Yashili’s shareholders are offered HK$3.50 in cash or HK$2.82 in cash and 0.68 share of a Mengniu-backed acquisition holding company. Zhang International and CA Dairy, representing in combination 75.3% of the issued share capital of Yashili, have executed irrevocable undertaking, pursuant to which they have committed to accept Mengniu’s offer.
Acquisition of Yashili is expected to elevate Mengniu’s position in milk powder business and bring synergy for both companies. A recent State Council executive meeting stressed the importance of strengthening the quality and safety of infant formula in China and encouraged consolidation and restructuring of companies involved in the formula business. Mengniu’s acquisition of Yashili has been fully supported by the Ministry of Industry and Information Technology as an implementation of the State Council’s policy.
