YAshili International Group Ltd has reached a final agreement to acquire Dumex China, an infant formula unit of French dairy giant Danone SA, for 150 million euros ($159 million).
The all-cash deal is subject to approval from authorities and Yashili's shareholders, according to a filing to the Hong Kong stock exchange yesterday.
Dumex is to become a wholly owned subsidiary of Yashili, a joint venture in which Danone holds a stake, after the transaction closes.
The deal comes after the French company earlier this year wrote down the value of Dumex by 398 million euros due to a shift by Chinese customers away from buying infant formula in supermarkets in favor of purchasing it online.
Danone owns 25 percent of Yashili after agreeing to pay HK$4.39 billion ($566 million) for the stake in October.
Mengniu Dairy owns 51.04 percent of Yashili.
Danone will not use the proceeds to hike its 9.9 percent stake in Mengniu, in contrast to what was announced when a memorandum of understanding for the sale of Dumex was signed between Mengniu, Yashili and Danone in July.
Dumex China was hard hit by a 2013 food safety scare involving its New Zealand supplier Fonterra.
The scare, which led the company to recall products, damaged the brand, despite later being shown to be unfounded.
Dumex was also fined in 2013 after a government anti-monopoly price-fixing probe.
