(Bloomberg) -- Inner Mongolia Yili Industrial Group Co., China's biggest dairy producer, is exploring a potential takeover of infant formula maker Ausnutria Dairy Corp., according to people familiar with the matter.
Yili has been speaking with banks about financing for a possible acquisition of Hong Kong-listed Ausnutria, the people said, asking not to be identified as the information is private. Ausnutria has a market value of about HK$13.8 billion ($1.8 billion).
Deliberations are ongoing and there's no certainty they will lead to a formal bid, the people said. Ausnutria could also attract takeover interest from other industry players, they said. A representative for Yili declined to comment, while representatives for Ausnutria didn't immediately respond to calls or emails requesting comment on a holiday.
Ausnutria, founded in 2003, sells products in China, North America, the Middle East and parts of Europe, according to its website. Its products include infant formula based on goat milk and organic cow milk made under the Kabrita and Neolac brand names, Kabrita's website shows. Kabrita traces its origins to a Dutch factory started in 1897.
In 2018, an arm of Chinese state-backed investment firm Citic Ltd. became Ausnutria's biggest shareholder. It owns about a 22% stake, according to the company's interim report.
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With assistance from Bloomberg
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