DEALS
Zhong Lun Advises Yashili on Privatization Proposal and Special Deals
Zhong Lun Advises Yashili on Privatization Proposal and Special Deals
On May 6, 2022, Yashili International Holdings Ltd. (“Yashili")（HKSE: 1230）announced that subject to the satisfaction of certain pre-conditions, a wholly-owned subsidiary of its controlling shareholder, China Mengniu Dairy Company Limited (“Mengniu") (HKSE: 2319), proposed to privatize Yashili by way of a scheme of arrangement under Cayman law. The offer price under the privatization proposal is HK$1.20 for each scheme share, and the total consideration is approximately HK$ 1.37 billion.
At the same time, Mengniu and Danone, the second largest shareholder of Yashili, proposed to unwind their existing relationships in certain aspects and for this purpose, the following proposed transactions shall be effected: (1) Mengniu agrees to purchase 20% equity interest in several chilled business JVs held by Danone at a consideration of no more than RMB1.6 billion. Such chilled business JVs are primarily engaged in the production, promotion, marketing and sale of chilled yoghurt, chilled yoghurt drinks and chilled spoonable dairy based desserts in the Chinese Mainland, Hong Kong SAR and Macau SAR; (2) Yashili agrees to sell to Danone 100% of the equity interest in Dumex Baby Food Co., Ltd.* (多美滋嬰幼兒食品有限公司) at a consideration of RMB870 million; and (3) Mengniu agrees to purchase 25% of the total issued share capital of Yashili held by Danone at a consideration of HK$1.42 billion, representing a price per share of HK$1.20. The above transactions constitute special deals pursuant to the Code on Takeovers and Mergers of Hong Kong. The disposal of Dumex by Yashili constitutes a major and connected transaction of Yashili under The Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.
Yashili Group is a domestically leading professional infant formula producer with international presence that focuses on the production and sales of premium infant formula and nutrition food. The Group has factories in Guangdong, Shanghai, Shanxi, Inner Mongolia and New Zealand. It sells infant formula through widely recognized brands such as Yashily, Reeborne, Dumex, Arla and Doraler, as well as various nutrition food including milk powder for adults and dissolvable products.
The Hong Kong office of Zhong Lun acts as the Hong Kong legal adviser to Yashili in the above transactions. This project is led by partner Mr. Jaycen Liao. Team members also include Jane Li and Kelvin Chiu.
