Mengniu paid HK$10B for Yashili — then privatized it for a third of the price

In June 2013, Mengniu Dairy launched a tender offer for Yashili International at a total cost exceeding HK$10 billion, making it the largest acquisition in China's dairy industry. Yashili, listed on the Hong Kong exchange since 2010, was a mid-tier infant formula maker with factories in China and New Zealand. Mengniu, a dairy giant strong in liquid milk, wanted a foothold in the higher-margin formula business.

The deal attracted Danone as a partner: in 2014 the French group paid nearly HK$4.4 billion for a 25% stake in Yashili. Yashili then spent HK$1.23 billion acquiring Dumex China from Danone. The ownership web grew more complex even as the market shifted underneath it — China's birth rate began a sustained decline, new national formula standards raised compliance costs, and Yashili's revenue slipped. By 2022 the unit posted a net loss of ¥230 million, its second consecutive year in the red.

In 2022 Mengniu bought out Danone's 25% for HK$1.42 billion and proposed to privatize Yashili at HK$1.20 a share — a total of roughly HK$2.9 billion. The delisting completed on 5 July 2023. An acquisition that cost over HK$10 billion was unwound for about a third of the price. The brand that was supposed to give Mengniu a formula empire became a line item to be tidied up.