Merger and acquisition movement is accelerating as companies vie for shares of China’s infant formula market. France’s dairy giant, Danone, which already sells infant formula in China under the Dumex brand, announced the purchase of a 25% stake in Yashili for $550 million while South Africa’s Aspen Holdings announced it has acquired a 50% stake in New Zealand’s New Milk which recently gained approval to sell in China in July of this year. Danone’s new stake will dilute Yashili’s biggest shareholder – China Mengniu Dairy’s stake down to 51% but will help facilitate Yashili’s expansion in China’s US$16.4 billion infant milk market in 2015. Aspen Holdings has already made moves into the Australian, South African, and Latin American infant formula markets through deals with Nestle. Its new stake in New Milk will not only give Aspen a foothold in China but will ensure steady long-term supplies of milk for its Australian operations.
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