Chinese Dairy Titan Yili to Buy Leading Thai Ice Cream Maker
Yicai Global
DATE:  Dec 01 2018
/ SOURCE:  yicai
Chinese Dairy Titan Yili to Buy Leading Thai Ice Cream Maker Chinese Dairy Titan Yili to Buy Leading Thai Ice Cream Maker

(Yicai Global) Nov. 30 -- China's largest dairy producer, state-backed Yili Industry Group, plans to buy a nearly 96.5 percent stake in one of Thailand's biggest ice cream makers to exploit the target's cold storage logistics network amid a Southeast Asian expansion.

Jingang Trade Holding, a subsidiary under the Inner Mongolia-based giant, will pay USD80.6 million up front for the shares in Chomthana, Yili said in a statement yesterday. It aims to complete the deal by June 30.

Chomthana has a high output, complete industrial chain and ample cold storage facilities, Yili said, adding that the target's cold chain logistics system, which spans most of Thailand, will help Yili grow its presence across the country.

Thailand is the second-largest ice cream market in Southeast Asia, behind Indonesia.  As well as distributing locally, Chomthana also exports its products to 14 other countries across four continents. While the acquisition will help Yili with its plans to expand in Thailand, it should still expect to face stiff competition from multinationals there, which hold larger market shares than the target firm.

Jingang Trade will buy the shares from Chomthana's four original shareholders. It will pick up 30 percent from Singapore's Xuegao, 18.95 percent from Malaysia-based Soh Bok Yew & Sons, and 29.36 percent and 18.15 percent from Pol Pongatra and Golden Kids, both headquartered in Thailand.

Chomthana earned USD18.2 million in operating income over the first half of this year, bagging a net profit of USD940,000 after deducting non-recurring gains and losses. In all of 2017, it made a USD3.1 million profit, but around USD2.7 million of that came from one-off transactions.

Editor: James Boynton

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Keywords:   M&A,Yili,Thailand