Meiji Holdings (TYO:2269) has agreed to transfer its drinking milk, yoghurt and B2B operations in China to Shanghai AustAsia Food, a subsidiary of AustAsia Group (HKG:2425), for 320 million yuan.
The decision stems from a challenging Chinese dairy market marked by shifting consumer needs, intensifying competition and rising costs.
The transaction, targeted to close by Dec. 31, involves three wholly owned subsidiaries, though certain yogurt-related intellectual property and brands are excluded, and Meiji will retain a production facility in Guangzhou for chocolate operations.
Meiji, which holds a 15.85% stake in AustAsia Group, appointed external advisors to ensure fairness and plans to sign a trademark license agreement to protect brand quality post-sale, according to a Tokyo bourse filing on Tuesday.
The deal remains subject to regulatory approvals and conditions precedent.