HONG KONG, April 28 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
(Reporting by Donny Kwok; Editing by Edmund Klamann)