(Corrects third paragraph to show discussions took place that didn’t yield progress.)
China Mengniu Dairy Co. (2319), the country’s largest milk-products producer, said it isn’t holding talks to buy an unidentified dairy-farming company, two days after a top executive said it had held discussions with China Modern Dairy Holdings Ltd. (1117)
“The company would like to clarify that there has not been any negotiation between the board and the alleged target company,” Mengniu said in a filing to Hong Kong’s stock exchange yesterday.
There were discussions, and there wasn’t much progress, Frank Ning, chairman of Mengniu, said on Jan. 14 in Hong Kong.
Buying Modern Dairy would give Mengniu more control over its milk supply as concerns about safety in the nation’s dairy industry linger. Hohhot, Inner Mongolia-based Mengniu blamed moldy feed given to cows for excessive toxins found in milk at one of the company’s warehouses in 2011.
The two companies had held discussions on a possible acquisition, Bloomberg reported in August, citing two people with knowledge of the matter who asked not to be identified because the information is private. Maanshan-based Modern Dairy supplies Mengniu with unpasteurized milk.
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