Chinese dairy giant Mengniu Dairy is acquiring a 5 per cent stake in Shanghai Ground Foods Tech Co., Ltd (Ground Food), the country’s premium cheese and liquid milk products manufacturer, per a stock exchange filing.
Ground Food, listed in Shanghai, will offer more than 20 million shares at a price of 14 yuan ($2) apiece. Ground Food’s cheese business has been witnessing rapid growth and the stake acquisition will help Mengniu Dairy to strengthen its presence in the Chinese market.
Established in 1998, the Shanghai-based Ground Food. It offers products under diverse brands such as Milkground, Ground, Changbai mountain, Aochun Pastures. The company specialises in cheese, butter, cream, condensed milk, and cheese slices, among others. Apart from Shanghai, Ground Food has manufacturing facilities in Tianjin, Changchun and Jilin across China.
Earlier in 2017, Ground Food acquired Brownes Dairy, a 133-year-old Western Australian dairy company, in a bid to integrate its global leading resource.
Mengniu Dairy, on the other hand, is also accelerating its presence in the global market. In November 2019, the Australian government had approved Mengniu Dairy Co’s $980.27 million takeover of infant formula maker Bellamy’s Australia Ltd. In a separate development, Mengniu has also agreed to buy Kirin Holdings Co.’s Australian beverage unit Lion Dairy & Drinks for about $419 million and the deal is expected to close in the first half of 2020.