Hopu sells 6% stake in Chinese dairy firm Mengniu

Mengniu said in a statement filed to the Hong Kong Stock Exchange last Friday that Ecostar Investment, a wholly-owned subsidiary of Hopu Master Fund I, has entered into a share purchase agreement with Arla Foods to sell its 30% stake in COFCO Dairy, which in turn holds approximately 19.66% of the total issued shares of Mengniu Dairy.

"With the growth rates that are driving the country forwards, now and in the years to come, it is crucial for Arla to gain a solid foothold in the Chinese market," Arla Foods' CEO Peder Tuborgh said in a press release. "We are proud that China's leading food company COFCO and most successful dairy company Mengniu have chosen Arla as their strategic business partner in China."

In 2009, Hopu teamed up with COFCO, part of China's biggest grain trader, to buy a 20% stake in Mengniu for HK$6.12 billion ($790 million), of which $236 million was channeled from Hopu Master Fund I.

The US dollar vehicle reached a final close of $2.5 billion in 2008, with Temasek Holdings and Goldman Sachs said to be among the investors. However, the firm disbanded in late 2010 amid reports that Richard Ong and Fenglei Fang, the co-founders, couldn't get along. Ong has since moved on the set up a new firm, RRJ Investment.

Hopu Master Fund I's past deals range from a $711 million PIPE investment in Bank of China in 2009 to a $20 million growth capital commitment for Lung Ming Investment in 2007.

Under the subscription agreement, Hopu is not allowed to sell all or any shares in COFCO Dairy within its lock-up period which will end at 27 July 2009. Following the announcement, the share price of Mengniu rose as much as 10% in Monday's morning trading.

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• Topics
• Greater China
• Exits
• Consumer
• Hopu Investment Management
• China
• Consumer
• Temasek Holdings
• Goldman Sachs
• Exit