China Modern Dairy Lifts Stake in China Shengmu to 78.43% in HK$1.53 Billion Deal

China Modern Dairy Holdings Ltd. has significantly increased its controlling stake in China Shengmu Organic Milk Ltd., acquiring nearly 4.38 billion shares in a transaction valued at approximately HK$1.53 billion (about $196 million). The move, disclosed in a stock exchange filing, solidifies its position as the dominant shareholder in the organic milk producer.

Transaction Details

According to a filing with the Hong Kong Stock Exchange on August 3, China Modern Dairy (1117.HK) increased its holdings through the acquisition of 4,379,519,346 shares in China Shengmu (1432.HK). The key figures of the deal are:

• Price per share: HK$0.35
• Total shares acquired: 4.38 billion (approximately)
• Total consideration: HK$1.533 billion (approximately)

This acquisition was the result of valid acceptances received under a mandatory cash offer made by China Modern Dairy for shares in China Shengmu.

Increased Ownership and Market Impact

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Following the transaction, China Modern Dairy's total holding in China Shengmu has risen to approximately 6.574 billion shares. This boosts its ownership stake from a minority position to a commanding 78.43%.

For investors, this move signals a major consolidation within China's dairy industry. By securing a supermajority stake, China Modern Dairy gains significant control over China Shengmu's strategic direction and operations, potentially leading to deeper integration and synergies between the two companies. The action effectively reduces China Shengmu's free-floating stock and cements its status as a subsidiary.

Context of the Offer

The share purchase is part of a larger, ongoing acquisition process. According to the disclosure, further details are available in a composite document dated June 30, 2026, and announcements made on October 30, 2025, and August 3, 2026. The transaction underscores a strategic push by China Modern Dairy to consolidate its interests in the premium and organic dairy segments, where China Shengmu is a key player.