As China increases regulation and consolidation within its dairy industry in order to clean up the market and to boost consumer confidence, the results will mean opportunities for larger market share and more M&A’s for higher quality, larger, domestic companies. Movement within the industry is already occurring. China Mengniu Dairy, China’s largest milk supplier announced plans to acquire Yashili International for US$16 million and previously acquired part of China Modern Dairy, increasing its stake in the company from 1% to 28%. Experts expect leading domestic companies to increase market share by 7%-8% away from foreign milk powder firms which have recently experienced their own contamination scandal and smaller domestic companies.
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