Yunfeng, CITIC PE seal $320m China dairy investment
Yunfeng Capital and CITIC Private Equity have agreed to invest at least RMB2 billion ($320.5 million) in an unlisted farming subsidiary of Chinese dairy producer Inner Mongolia Yili Industrial Group.
Yili, which trades on the Shanghai bourse, said in a regulatory filing that the two private equity investors would hold a 60% stake in Inner Mongolia Yili Livestock Development. It added that the bringing outside investment into a dedicated farming unit is intended to support the construction of new farms and improve the company's long-term supply of raw milk.
In this respect the deal bears strong similarities with those struck by several PE investors in recent months. The general aim is to capitalize on growing demand for fresh milk and consumers' willingness to pay a premium for safe and better quality products. Another related consideration is the government's wish to see consolidation within the dairy industry and the emergence of large-scale players that operate to US and European standards.
Last October, Affinity Equity Partners committed $123 million to a joint venture with Beijing Capital Agribusiness Group - also known as Sunlon - that assumed control of the state-owned company's 32 dairy farms. The plan is to increase the current 46,000 head of cattle to 100,000 within five years.
Shanghai-listed Bright Dairy & Food, a subsidiary of Chinese conglomerate Bright Food Group, announced in February that it would form a dairy farming joint venture with RRJ Capital. The PE firm's $250 million contribution will in part be used to build new farms.
KKR and CDH Investments were the first movers in the space, backing China Modern Dairy in 2008. They took the company public and then made another partial exit last year when China Mengniu Dairy - Modern Dairy's long-standing off-take partner - increased its stake in the business.
More recently, the two PE firms teamed up with Modern Dairy to create a $140 million greenfield farming joint venture that delivers premium raw milk to domestic consumers.
Yunfeng, which was set up by Jack Ma and David Yu, founders of Alibaba Group and Target Media, respectively, last month reached a final close of $1.1 billion on its second fund.
More on Consumer
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.