Yili milks success with bid for rival

China’s largest diary producer Yili Group is planning to buy a stake in a Hong Kong-listed rival for around $680 million, doubling down on a high-growth sector that has been beset by multiple scandals.

Yili Group turned to equity investors for a private placement over the weekend, giving it more than enough firepower to buy a 37% stake in Shengmu Organic Milk, enough to trigger a mandatory general offer according to Hong Kong rules. The deal was well-received by investors, sending Yili’s stock 10% higher on its Monday open.

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