Mengniu issued an announcement yesterday, spending nearly 10 billion to acquire 75.3% of Yashili. Encouraged by this good news, Mengniu and Yashili's stock prices have risen. Investors are optimistic about the merger and acquisition plan, and they can achieve a win-win situation. They have spent money on buying. As of the close, Mengniu gained 6.89% to HK$28.7 million, with a turnover of HK$592 million; Yashili rose 3%. 3.43 Hong Kong dollars, with 322 million transactions.

Mengniu Dairy and Yashili International announced yesterday that Mengniu Dairy has issued a tender offer to all shareholders of Yashili, and obtained the irrevocable offer of acceptance of the offer by the controlling shareholder Zhangshi International Investment Co., Ltd. and CA Dairy Holdings, the second largest shareholder of Carlyle Asia Fund. Commitment, commitment to sell a total of about 75.3% of the shares.

In addition, according to a report by the Wall Street Journal (blog, Weibo) (WSJ) on Tuesday, Mengniu Dairy, the largest dairy supplier in China, announced that it has purchased a majority stake in small-scale competitor Yashili International Holdings. The valuation of the latter is approximately 1.6 billion U.S. dollars. HSBC, Standard Chartered Bank Hong Kong and the Swiss Bank Group will be Mengniu Dairy's advisers on this transaction. One source stated that HSBC and Standard Chartered Bank will provide full financing for the transaction.

Sun Yiping, CEO of Mengniu Dairy, pointed out that the cooperation with Yashili will “greatly enhance the business platform of the two companies in order to provide consumers with more safe, healthy and high-quality dairy products.”

Motorola said Mengniu (02319.HK) purchased Yashili (01230.HK) at a price of 3.5 yuan per share (a premium of 9.4%), which is Yashili’s forecast earnings of 15 times per share for the 2014 fiscal year. The bank has a positive view of the transaction. It is believed that the transaction will help Mengniu's earnings increase by 5-7% in 2014. What's more, it will help Mengniu's fastest growing baby milk powder business in the Mainland. Excluding the above acquisitions, the bank raised Mengniu’s earnings for 1% and 10% for the fiscal year, reflecting several factors including: 1) Strong sales momentum, which was mainly due to the simplification of the single item management strategy and increased sales. Channels, and Danone’s joint ventures; 2) Improvements in product structure, gross profit margins expanded more than expected; 3) Increased contribution of modern animal husbandry by associates, consistent with the company’s strategy to expand high-end products. Deng Shengxing, general manager of AMTD Securities Business Department, stated that this The price of Mengniu’s acquisition of Yashili was not expected. “There are not many options for acquisition, but we have to pay this price.” He believes that the 9.4% premium is not high. It means that Mengniu just wants to buy shares held by major shareholders of Yashili at a lower price to carry out a full purchase. At the same time, it retains enough public shareholders at a lower premium. It is expected that Mengniu will complete the acquisition. Yashili will not delist.