Yili inks deal to become biggest Ausnutria shareholder

By Jim Cornall contact

- Last updated on GMT

Once the deal is completed, Yili will control 34.33% of Ausnutria shares. Pic: Yili.
Once the deal is completed, Yili will control 34.33% of Ausnutria shares. Pic: Yili.

Related tags: Yili, goat milk, Infant formula, Ausnutria

Chinese dairy giant Inner Mongolia Yili Industrial Group Co., Ltd. has announced it has taken a stake in goat milk formula company Ausnutria Dairy Co. Ltd. to become its largest shareholder.

The company will team up with Ausnutria Dairy through its wholly-owned subsidiary Hong Kong Jingang Trade Holding Co., Ltd., as a step to move into the infant formula and nutrition product business.

Jingang will acquire a total of 531m shares from other shareholders at a price of HK$10.06 (US$1.29) per share, which represents approximately 30.89% of the total issued shares of Ausnutria. In addition, Ausnutria will issue 90m new shares to Jingang at the price of HK$10.06 per share. If the above two transactions can be successfully completed, Jingang will hold 621m Ausnutria shares, or 34.33% of the total, making Yili the largest single shareholder of the company.

Pan Gang, chairman of Yili Group, said at the signing of the deal that as the two enterprises have much in common, Yili recognizes the values, strategic layout, and the core team of Ausnutria. In the years to come, Yili will bring into full play its strengths in terms of company size, brand building, channels and industrial chain to enable Ausnutria’s development over the long term. He said the cooperation is expected to form synergies and blaze new trails in the fields of milk powder, dairy products, and other health food.

Yan Weibin, chairman of Ausnutria, said Yili is the first Chinese enterprise to become a top player in the global dairy industry, adding for Ausnutria, a strategic investor like Yili will not only create synergy along the industrial chain but also empower Ausnutria in terms of management and strategic planning. He stated the strategic cooperation will have a profound impact on both companies and drive the development of the world’s dairy and nutrition industries.

Yili said the partnership will strengthen its leadership in milk formula and facilitate the company’s entry into the nutrition products market.

Infant formula is a category Yili said it will focus on to tap into its full potential in the future. According to the latest data from Nielsen, in August 2021, Yili’s Jinlingguan Series took the lead among all brands of its kind in terms of the growth rate of all channels in the Chinese market. Yili said it is also capturing a growing share of the market of goat’s milk infant formula; the newly launched Jinlingguan UITSTEKEND GEITENMELK has seen a surge in sales as high as 200%, according to the company.

Ausnutria said its Kabrita goat milk formula brand has become a flagship product in China’s infant formula market. According to Nielsen, Ausnutria has had a share of more than 60% in China’s market of imported goat milk formula for three consecutive years since 2018 and topped the world in total sales of goat milk formula.

Yili said when the transaction is completed, Ausnutria will see a strong boost to its development in the long run, and Yili will be able to speed up its strategic move into the milk formula business. While starting their partnership from infant formula, especially goat milk-based formula, Ausnutria has also established a presence with nutrition products such as dietary supplements, probiotics, and food for special medical purposes, and is developing into a nutrition product and health service provider covering all ages and the full life cycle.

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