Baby formula maker Yashili International Holdings Ltd. (01230.HK) on Monday announced it is selling the entire equity interest of its Zhengzhou subsidiary to a joint venture formed by China Mengniu Investment Co. Ltd., a wholly owned subsidiary of China Mengniu Dairy Co. Ltd. (02319.HK), and White Wave Hong Kong Ltd. for a combined 376.66 million yuan (US$62.25 million), according to a regulatory filing. Mengniu will have a 51 percent stake in the joint venture while the rest will be held by White Wave. The principal asset of Yashili’s Zhengzhou unit is a factory in Henan province, which is currently under construction and will be principally engaged in the manufacture, packaging and distribution of nutrition products, it said. Yashili intends to use the net proceeds as working capital and to expand its milk powder business. Mengniu International, a subsidiary of Mengniu, holds a 76.58 percent in Yashili.
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