The deal cost $254m, and Meiji said it will allow the company to expand its dairy business in China.
Meiji said it has signed a sale and purchase agreement with Japfa LTD, the shareholder of AustAsia, with AustAsia expected to become an equity-method affiliate of Meiji. Japfa also has dairy operations in Indonesia.
The Meiji Group said it aims to improve its long-term corporate value based on its Meiji Group 20206 Vision business plan. The company has focused on China as a priority area to achieve its goal.
Meiji said its milk, yogurt, ice cream and confectionery businesses in China are already expanding; in particular the demand for chilled milk has been growing in east China.
To address this, Meiji said it will expand production capacity at its existing Meiji Dairies (Suzhou) Co Ltd factory for milk and yogurt production from spring 2021, and will build a new factory in Tianjin, which is expected to be operational in the second half of the 2022 financial year.
AustAsia already supplies milk to Meiji’s dairy business. It has seven farms in China with around 80,000 cows.