Modern Farming plans to acquire a 75 percent stake in Ai Yang Niu Technology for RMB 288 million 05-02-2022

China Modern Farming Dairy Holdings Ltd. (Modern Farming) is a dairy company founded in Ma'anshan City, Anhui Province, China and is the holding company of Mengniu Group, which produces products such as milk, yogurt, ice cream, powdered milk, and milk tablets. According to a recent report, the enterprise Ai Yang Niu Technology, an entrepreneurial project of former employees of Mengniu Group, will sell 75% of their stake to Modern Farming. Ai Yang Niu Technology has been cooperating with Mengniu since receiving a large investment from Mengniu in 2015. The announcement of the acquisition was made on March 15, and the total amount of the acquisition is RMB 288 million.

Ai Yang Niu Technology is mainly engaged in animal husbandry e-commerce platforms, animal husbandry service cloud platforms, operation of animal husbandry service industries, sales of feed, additives and veterinary drugs and transaction consulting of agricultural and livestock products in China.

On the announcement date, Mengniu Dairy indirectly owned 73.66% of the target company Ai Yang Niu Technology and holds a total of 1.65% of the shares of the buyer, Modern Farming and hence the transfer of shares constitutes a connected transaction. After the transaction is completed, Mengniu Dairy's shareholding in Ai Yang Niu Technology will be reduced to 25%.

Ai Yang Niu Technology specializes in dairy industry e-commerce

From the investment in 2015 to the sale in 2022, Mengniu’s investment in Ai Yang Niu Technology has led to RMB 187 million in revenue. The target price of RMB 288 million is equivalent to 22 times the price-earnings ratio, and the acquisition premium rate is 10 times.

According to publically released data, Ai Yang Niu Technology has built a comprehensive e-commerce platform that integrates functions such as buying and selling transactions, financing and payment, logistics and distribution, and industrial re-education in the model of the internet and dairy industry chain. The company's material distribution center shortens the length of the supply chain for the ranches that engage in animal husbandry.

Ai Yang Niu is the first platform in the industry to realize online supply chain financing, and it is also the first e-commerce platform to use blockchain financial services. Currently, the price-earnings ratio of Mengniu and Modern Farming is 28.18 times and 7.6 times, and the price-earnings ratio of e-commerce platform Alibaba is 28 times.

Acquisition of Ai Yang Niu Technology will give Modern Farming a stronger place in the market

According to a Modern Farming representative, by acquiring a majority stake in Ai Yang Niu Technology, Modern Farming can make use of the resources available to Ai Yang Niu Technology, pay close attention to the market trend of pasture materials, reduce its procurement costs, and optimize its operation and management capabilities. Additionally, Modern Farming will further leverage its industrial chain synergy advantages as a leading dairy enterprise and provide upstream and downstream services such as digital technology, supply chain finance, and breeding technology through an ecological sharing platform to improve its profitability.

For more information, please check our Dairy Products China News.

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & feed and life science markets. Founded in 2001, CCM offers a range of content solutions, from price and trade analysis to industry newsletters and customized market research reports. CCM is a brand of Kcomber Inc.

For more information about CCM, please visit or get in touch with us directly by emailing or calling +86-20-37616606.

Subscribe to our Newsletter


Next Press