KKR and CDH sells down China Modern Dairy stakes

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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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