WhiteWave Foods To Form Joint Venture With China Mengniu Dairy Company

(RTTNews) - The WhiteWave Foods Co. (WWAV) announced that it has entered into a joint venture agreement with China Mengniu Dairy Company Limited, a Chinese dairy company.

The company said the joint venture intends to manufacture, market and sell a range of nutritious products in China. The joint venture has also executed an agreement to purchase Yashili Zhengzhou, a subsidiary of Yashili International Holdings Ltd. Zhengzhou's primary asset is a production facility currently under construction in China, where the joint venture intends to manufacture its products. Mengniu is the majority owner of Yashili.

Under the terms of the agreement, WhiteWave will own a 49% stake in the venture and Mengniu will own a 51% stake. The purchase price for Zhengzhou is expected to be approximately $85 million or RMB 510 million, including about $62 million or RMB 377 million for the purchase of equity and the balance for the repayment and assumption of debt and other obligations.

Each joint venture party's share of the purchase price for Zhengzhou will be consistent with its ownership interest in the venture. The parties expect to make additional investments to support the start-up and commercialization of the joint venture.