Yashili to acquire Dumex at 150 million euros

Mengniu and Yashili both issued announcements yesterday, announcing that they will implement the final agreement to purchase Dumex from Danone. This also means that Yashili will have more Dumex brands, and the Mengniu milk powder brand will expand again.

As early as July of this year, related companies including Danone, Mengniu and Yashili also announced the integration of domestic milk powder industry. In accordance with the Memorandum of Understanding signed between Mengniu Dairy, Yashili and Danone at the time, Danone intended to transfer all of the Dumex shares held by Danone to Yashili, which is owned by Mengniu. At the same time, Danone will use the proceeds from the transfer of Dumex shares to subscribe for Mengniu’s private placement through COFCO Dairy. Shares. The parties will begin due diligence on the transaction intention and sign a formal agreement. Yesterday, many parties announced that the amount involved in this transaction will reach 150 million euros.

In the announcement released yesterday, Yashili also mentioned Dumex’s financial situation in recent years. In 2012, Dumex had sales of 5.733 billion yuan and net profit of 765 million yuan. However, by 2014, Dumex had sales of only 1.319 billion yuan and net profit loss of 771 million yuan. According to the audited financial statements prepared by Dumex in accordance with the PRC accounting standards, as of the end of 2014, the value of Dumex's total assets was RMB 525 million and its net assets was a loss of RMB 1.051 billion.

It is worth mentioning that before 2013, Dumex had been sitting firmly in the top few domestic sales of the powdered milk market, and its market position was firm. However, in August 2013, Dumex suffered an incident with the botulism of the Fonterra Botox, which has been hit hard. This ended the cooperation with Fonterra and transferred the milk source to Europe, but the company's performance failed to recover from it. Therefore, in the eyes of the industry, Danone’s sale of Dumex is an act of rejection, thus focusing on the development and sale of original cans of milk powder. In Yashili's case, Dumex is more likely to serve as a strong milk powder business segment.