HONG KONG, Jan 5 (Reuters) - China Mengniu Dairy Co Ltd said on Thursday it would pay HK$1.87 billion ($241 million) to raise its stake in China Modern Dairy Holdings Ltd to secure a stable supply of raw milk.
China Mengniu, which currently owns 25.4 percent of Modern Dairy, said it would buy 965.47 million shares in China Modern Dairy from a joint venture of KKR China Growth Fund L.P. and CDH Fund IV, L.P. at HK$1.94 per share.
The purchase would boost China Mengniu’s stake in the company to 39.9 percent. The joint venture would cease to hold any shares in China Modern Dairy following the deal.
China Mengniu will be required to make a general offer for all outstanding shares it does not already own in China Modern Dairy, the two companies said in a joint statement.
China Mengniu said it would fund the purchase through internal resources and external debt facilities, while it aimed to maintain the listing status of China Modern Dairy after the deal. ($1 = 7.7548 Hong Kong dollars) (Reporting by Donny Kwok; Editing by Himani Sarkar)