Yili recently published an announcement, stating that the company plans to acquire Zhongdi Dairy via its newly established holding subsidiary Wholesome Harvest Limited and the price of the general offer is HKD1.132 per share, and the total consideration is about HKD1.66 billion.
A share subscription agreement will be signed and implemented first for the transaction. Wholesome Harvest Limited will sign the agreement with Golden Port (Hong Kong) Trading Limited, Zhang Jianshe, YeGu Investment Company Limited, and Green Farmlands Group.
According to the share subscription agreement, those parties will transfer their shares of Zhongdi Dairy to Wholesome Harvest Limited. After that, Wholesome Harvest Limited will directly hold 1.14 billion shares of Zhongdi Dairy, accounting for 43.75% of the issued share capital of the company.
Commenting on the transaction, Yili said that as a modern dairy cow breeding enterprise in China, Zhongdi Dairy has a certain scale of breeding and its business model covers multiple links including dairy cow breeding and high-quality raw milk production and sales. It also has a relatively complete industrial chain layout. This transaction will help increase Yili's participation in and control over large-scale upstream animal husbandry resources and consolidate the company's leading position in the dairy industry.
In addition, Yili said that the transaction will help further enhance the company's competitiveness, meet the needs of the company's strategic development, have important implications for the company's long-term development and strategic layout, and conform to the interests of all shareholders of the company. This transaction will lead to changes in the scope of the company's consolidated statements, which is expected to bring certain operating income and profit contributions to the company in the future.