Bright Dairy planning to acquire raw-milk supplier from parent firm

Milk delivery tricycles of Bright Food are pictured in Shanghai, April 21, 2004.[Photo/CFP]

Bright Dairy & Food Co, China's third-largest milk producer by market value, plans to purchase raw-milk supply operations from its State-owned parent.

The company will acquire cattle-breeding and raw-milk businesses under its parent's Shanghai Dairy Group unit, Pan Jianjun, a spokesman for the group, said on Thursday. The deal would help Bright Food Group Co consolidate more dairy operations under its main listed arm, Pan said.

Bright Food Group, controlled by the Shanghai government, joins State-owned COFCO Corp in trying to boost competitiveness by merging some of its disparate businesses. The move would help Bright Dairy ensure a reliable raw milk supply as it seeks to boost beverage sales in Asia's largest economy.

Shanghai Dairy's cattle-breeding operations include 24 dairy farms with more than 35,000 cows, according to its website. Calls to Bright Dairy's headquarters in Shanghai were not answered outside regular business hours. A public-relations representative for Shanghai Dairy also did not answer phone calls seeking comment.

Bright Dairy said earlier this month it will seek as much as 9 billion yuan ($1.45 billion) in a private share placement to buy its parent's controlling stake in Israeli dairy producer Tnuva Food Industries Ltd.

Bright Food Group said last month it will merge with edible oil maker Shanghai Liangyou Group.