HONG KONG, April 28 (Reuters) - China Shengmu Organic Milk Ltd said on Friday that a deal to sell a controlling stake to Inner Mongolia Yili Industrial Group Co Ltd was scrapped after it failed to get regulatory approval from Chinese authorities before a deadline last week.
Shares of China Shengmu fell as much as 13.3 percent to HK$1.69 on Friday morning, their lowest in nearly eight months. That compared with a 0.2 percent dip in the benchmark index .
China Shengmu, a raw milk producer, said last November that Yili would buy a 37 percent stake for $682 million to help secure supplies of raw milk. Yili, one of China’s top dairy product makers, would then make a cash offer for all outstanding shares it did not already own at HK$2.25 each.
Yili told China Shengmu it had terminated the deal after not receiving approval from the Chinese Ministry of Commerce’s Anti-Monopoly Bureau by an April 21 deadline, China Shengmu said. (Reporting by Donny Kwok; Editing by Edmund Klamann)