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KKR and CDH sells down China Modern Dairy stakes

8 May 2013

milk cow udderBuyout firms KKR and CDH Investments have sold stakes in Chinese milk producer China Modern Dairy Holdings to strategic buyer China Mengniu Dairy.

The two firms have sold a combined 26.92 per cent interest in the business for $419m, lifting Mengniu’s stake to 28 per cent. KKR-backed Advanced Dairy sold a 20.4 per cent stake, reducing its shareholding to 3.6 per cent, while CDH offloaded 6.5 per cent.

The acquisition price of HK$2.45 per share represents a 12 per cent discount to Modern Dairy’s closing price on Tuesday.

KKR acquired a 34.5 per cent interest in Modern Dairy for $150m in 2008. Two years later the business was floated with KKR reducing its interest to 24 per cent.

The buyout major is set to bag a return of nearly three times on its exit from the business, said Reuters, citing a person with direct knowledge of the situation.

Last month it was reported that KKR was considering making a bid for mining giant Rio Tinto’s interest in the Northparkes copper and gold mine in Australia.

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