China Mengniu Dairy Co Ltd (2319.HK) has offered to buy out China Modern Dairy Holdings Ltd (1117.HK) for $826 million in a deal that will help it secure a stable supply of raw milk.

This follows China Mengniu’s purchase of 965.47 million shares in Modern Dairy at HK$1.94 apiece, from a joint venture of KKR China Growth Fund L.P. (KKR.N) and CDH Fund IV L.P, that raised its stake in Modern Dairy to 39.9 percent from the current 25.4 percent. Under Hong Kong’s corporate rules, the owner of more than a 30 percent stake in a company will have to make an offer to buy out the shares it does not already own.

China Mengniu said it will make an offer for the remaining China Modern Dairy shares at the same price of HK$1.94 each, a 7-percent premium to their Wednesday close. It expects to spend another HK$6.4 billion ($826 million) on that transaction, boosting its stake further to 91 percent.

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