BEIJING -- China's second-largest dairy company, China Mengniu Dairy, said Monday it has offered to acquire baby formula maker Bellamy's Australia for up to 1.46 billion Australian dollars ($1 billion).
The deal would be Hong Kong-based Mengniu's first purchase of a company outside China.
For Mengniu, the deal appears aimed at expanding overseas as growth slows at home. Bellamy's has operations in Southeast Asia and New Zealand. Mengniu's own lineup of dairy product facilities also includes some in New Zealand, as well as ones opened in Indonesia last year.
The Chinese company's CEO, Lu Minfang, noted Bellamy's "track record of supplying high-quality organic products," adding that the Australian company's "leading organic brand position and ... supply chain are critical to Mengniu."
Mengniu did not provide a completion date for the transaction. Its cash offer, including a special dividend, amounts to AU$13.25 per share for the Australian Securities Exchange-listed Bellamy's.
Bellamy's, one of Australia's biggest milk powder producers, reaped an after-tax net profit of AU$21.7 million in fiscal 2019 on sales of AU$266 million.
Mengniu's foray overseas follows top-ranked Yili Group's deal in March to buy New Zealand-based Westland Milk.
Shares in Mengniu fell over 2% in Hong Kong, while Bellamy's stock jumped nearly 55%, roughly reflecting the premium offered by the Chinese company.
China's dairy market grew 4.34% in 2018 to 436.2 billion yuan ($61.7 billion), according to Chinese research firm Intelligence Research Group.
The market "has little prospect of seeing the rapid growth it once did as the Chinese economy slows," an industry watcher said.