Mengniu Dairy Company was established less than three years ago and is a relatively typical entrepreneurial enterprise. In June 2002, institutional investors such as Morgan Stanley registered a Cayman company in the Cayman Islands. In September 2002, the founders of Mengniu Dairy registered Jinniu Company in the British Virgin Islands. On the same day, Mengniu Dairy's investors, business contacts and employees registered Yinniu Company. Jinniu and Silver Bull each acquired 50% of the equity of the Cayman Islands company for US$1, and then established the Mauritius company, a wholly-owned subsidiary of the Cayman Islands company. The money invested was eventually exchanged for 66.7% of the equity of Mengniu Dairy in China through Mauritius, and Mengniu Dairy changed from a private enterprise to a joint venture. In July 2009, COFCO invested HK$6.1 billion to acquire 20% of Mengniu's equity, and COFCO became Mengniu's largest shareholder. Headquartered in the core area of ??China's dairy capital - Inner Mongolia Horinger Economic Development Zone, it has total assets of more than 30 billion yuan as of 2009, nearly 30,000 employees, and an annual dairy production capacity of 6 million tons. So far, including the Helin base, Mengniu Dairy Group has established more than 20 production bases in 16 provinces, autonomous regions and municipalities across the country, with more than 400 items in five series including liquid milk, yogurt, ice cream, dairy products and cheese. With its excellent quality, it has won the honors of "Chinese Famous Brand", "National Brand", "China's Well-known Trademark", "Top 500 Chinese Brands" China Brand Value Research Institute", "National Inspection Exemption" and the first place in consumer comprehensive satisfaction. title. At present, it is the top brand in the industry together with Lenovo in the IT industry, Alibaba in the network industry, and Haier in the electrical appliance industry. It is also one of the most valuable brands in China.
On September 19, 2008, the General Administration of Quality Supervision, Inspection and Quarantine revoked the title of China Famous Brand Product for the liquid milk products of Inner Mongolia Mengniu Dairy Group Co., Ltd.
Mengniu Dairy announced on the Hong Kong Stock Exchange on the evening of July 6 that the company will sell 20% of Mengniu’s shares to a new company jointly invested by COFCO and Hopu Fund at a price of HK$17.60 per share. Equity, involving a transaction amount of up to HK$6.1 billion, thus becoming the largest shareholder of Mengniu Dairy. Ning Gaoning joined Mengniu's board of directors and became a non-executive director of Mengniu.
On April 12, 2012, Mengniu Dairy stated that according to the company's articles of association, President Yang Wenjun's two-term term has expired. With the approval of the board of directors, he will no longer hold the concurrent position of president, and the position of president will be taken over by Sun Yiping. Mengniu has completely entered the COFCO era.
In August 2015, Mengniu Dairy was listed on the "Top 500 Chinese Manufacturing Enterprises in 2015" sponsored by the China Manufacturing Enterprises Association, ranking 48th. Domestic market, and exported to Mongolia, Southeast Asia, Saipan, the United States, Hong Kong and Macao and other countries and regions. In the 7 years since their establishment, they have created the world-famous “Mengniu Speed” and “Mengniu Miracle”. By the end of 2005, main business income increased from 37 million yuan to 10.8 billion yuan, an average annual increase of 158%; annual tax payment increased from 1 million yuan to 487 million yuan, an average annual increase of 180%; net profit increased from 530,000 yuan to 456 million yuan, an average annual increase of 208%; the market share of its main products has reached more than 30%; UHT milk sales volume ranks first in the world, liquid milk and ice cream sales rank first in the country; dairy product export volume ranks first in the country. As a key national leading enterprise in agricultural industrialization, Mengniu has established more than 3,700 milk stations in the surrounding areas of its production bases. It has purchased more than 6.5 million tons of fresh milk and distributed more than 12 billion yuan in milk payments to farmers and herdsmen in 2005 alone. In one year, more than 4.2 billion yuan of milk payments were distributed; the average daily milk collection volume reached nearly 9,000 tons, ranking first in the industry. In terms of social welfare undertakings, in 2003, it took the lead in donating 12 million yuan of milk to fight SARS; in 2004, it donated more than 30 million yuan of milk to teachers across the country; on June 1, 2004, Mengniu was successfully listed in Hong Kong; in 2005, it invested 10 million yuan participated in the establishment of the Hohhot Dairy Venture Fund, and Chairman Niu Gensheng donated all his personal shares to establish the "Lao Niu Special Fund"; in 2005, the "Mengniu Sour Yoghurt Super Girl" youth girl show jointly created by Mengniu Dairy Group and Hunan Satellite TV, The whole country was shocked; in 2006, in active response to the Prime Minister's call, it took the lead in donating milk to 500 primary schools in poor areas across the country for one year, with an estimated benefit of 70,000 to 100,000 primary school students, with a total value of 110 million yuan. Rabobank of the Netherlands released the 2009 Global Dairy Company Ranking Report. China's Mengniu Dairy Group ranked 19th. This is the first time that China's dairy industry has entered the top 20.
The cornerstone of Mengniu was built in a wasteland. Nine years later, Mengniu Group can stand shoulder to shoulder with Yili Group, the largest dairy company in China, and is known as the "Two Heroes of the Prairie Dairy Industry." How did Mengniu build the Mengniu brand into the top brand in China's dairy industry in just six years? Niu Gensheng, Chairman and President of Mengniu, told the secret of Mengniu’s brand creation.
On August 28, 2015, the "Mengniu" brand was listed on the "Top 500 Chinese Brands in 2015" sponsored by the "China Brand Value Research Institute", ranking 78th. According to Mengniu Dairy's "Prospectus", Mengniu Dairy had six major shareholders before its listing, namely Yinniu Company (44.8%), Jinniu Company (21.1%), Niu Gensheng (6.1%), MS Dairy (8.7%) , CDH (5.9%) and CIC (3.4%).
Among them, the latter three are companies established by three foreign financial institutions, namely Morgan Stanley, CDH Investments and Actis Investment, to invest in Mengniu, while Jinniu Company and Yinniu Company are respectively owned by senior executives of Mengniu. An overseas company registered in the BVI on September 23, 2002, with management personnel and "senior executives of companies related to Mengniu's business". Jinniu Company is composed of Mengniu executives. It has 15 shareholders, with Niu Gensheng holding 28%.
On July 7, 2009, the new company established by China COFCO Group and Hopu Fund (COFCO Group held 70% of the shares) invested HKD 6.1 billion to acquire Mengniu 20 at a price of HKD 17.6 per share. % of the equity, COFCO becomes the largest shareholder of Mengniu!
Mengniu Dairy Group and Junlebao Dairy jointly held a strategic cooperation press conference in Beijing, marking the beginning of the cooperation between China’s number one dairy brand and the fourth brand in the yogurt market: Mengniu will invest 469.2 million yuan It holds 51% of the equity of Junlebao Dairy and becomes the largest shareholder of Junlebao. This cooperation will become the most influential cooperation in China's dairy industry in the past two years, heralding the coming of a "wave" of alliances, reorganizations, mergers and acquisitions in China's dairy industry. "As the scale and strength of enterprises continue to expand, mergers and acquisitions have become an important measure to enhance competitiveness. This is also the only way for many foreign dairy giants to develop. Facing fierce competition in domestic and foreign markets, China's dairy industry must If we want to develop and expand faster and create a world-class national dairy brand, mergers and acquisitions are very necessary." Song Kungang, chairman of the China Dairy Industry Association, said at the signing ceremony, "The cooperation between Mengniu and Junlebao can be said to be a perfect fit. At this time, it is not only conducive to achieving win-win cooperation between the two parties, but also provides a good example for China's dairy industry to enter the era of brand integration."
Strong alliances create a harmonious and win-win situation
According to data, Junlebao was established in 1995 and has now developed into the largest yogurt production base in North China.
Mengniu President Yang Wenjun revealed at the press conference that Junlebao’s business target will be at least doubled, targeting 3-4 billion yuan. Yang Wenjun said that this cooperation can be described as a "three-win": first, winning with industry leaders, which is conducive to accelerating the development of national brands through capital integration and harmonious competition; second, winning with consumers, which is conducive to harmonious competition; The two parties will enjoy the full sharing of milk sources, R&D and other resources to provide consumers with more and higher-quality products; third, win-win cooperation with the industrial chain. The cooperation between the two parties will help to better consolidate the foundation of pasture milk sources. Promote the healthy development of the dairy industry chain.
Focus on the advantages of yogurt
Data show that the market capacity of low-temperature products in the domestic retail market has reached about 13 billion yuan, with a compound growth rate of 18.2% in the past three years, of which yogurt has a compound growth rate of 18.2% in the past three years. The growth rate of production and sales is as high as more than 20%, which is much higher than the growth rate of other dairy products. According to the industry, with the improvement of residents' living standards and the enhancement of health awareness, the yogurt market will expand rapidly in the next few years. Therefore, the yogurt market has become a battleground for dairy companies.
After this cooperation, the yogurt market share of the companies under the Mengniu Group will reach more than 30%, and the two brands Mengniu and Junlebao will form a united front.
The industry believes that the more profound impact of this integration is the complementary advantages of both parties in terms of "soft assets" such as product research and development, production technology, quality control, etc., which Junlebao can enjoy with Mengniu Mengniu's technological innovation platforms and related R&D achievements, including Asia's largest high-tech dairy research institute and overseas workstations, have improved the technological content and market competitiveness of Junlebao's low-temperature products.
Both parties will work together to develop more high value-added yogurt products for consumers that meet different consumer needs. In the past, Mengniu Guanyi Milk pioneered high-end functional yogurt in China, while Junlebao's red date yogurt created a sales miracle in this category with its innovative taste. Such product innovation is also expected to achieve longer-term development in the future.
Jin Ye, Dean of the School of Food Science and Engineering of Inner Mongolia Agricultural University, believes: “The core competitiveness of China’s dairy industry in the future lies in integrating with the world’s most advanced dairy technology and improving its capabilities in high value-added dairy products. Independent research and development capabilities. The strategic cooperation between Mengniu and Junlebao, the mutual complementation of scientific research strength and experience, will promote the research and development and application of low-temperature dairy products to a new level. This cooperation will have a huge role in strengthening low-temperature dairy products with high added value and improving the international competitiveness of China’s dairy industry.”
Brand integration and intensive development
After the cooperation between the two parties. , Junlebao will leverage Mengniu's advantages in milk sources, research and development, quality control and marketing channels to accelerate the transformation of "Junlebao" from a strong regional brand to a national brand, and better support the sustainable and healthy development of China's dairy industry.
It is understood that as early as 2009, the Ministry of Industry and Information Technology and the National Development and Reform Commission formulated the "Dairy Industry Policy" to encourage domestic dairy companies to integrate processing resources through asset restructuring, mergers and acquisitions, strong alliances, etc. Improve the level of industry. The recommendations of the “Twelfth Five-Year Plan” further proposed that the overall development scale of China’s dairy industry should change from extensive to quality and efficiency. This means that the cooperation between Mengniu and Junlebao may kick off the consolidation of China's dairy industry.
Liu Guoguo, chairman of the China Dairy Association, said at the press conference that the cooperation between Mengniu and Junlebao meets three criteria. The first is that it is in line with the spirit of economic transformation in the "Twelfth Five-Year Plan"; The second is in line with industry policies to restructure dairy industry resources and increase industry concentration. The third is in line with the laws of the market economy that shift from competition to coopetition.
“Many industries in our country are highly fragmented, and market concentration is far from enough, resulting in poor economies of scale and hindering product quality control and technological progress. my country’s dairy industry also has such problems, and even It is more prominent. To solve this situation, we must vigorously integrate industry resources, and mergers and acquisitions are inevitable and the most effective way." Ma Yu, director of the Research Institute of the Ministry of Commerce, believes that "Mengniu's past performance mainly relies on self-built factories. There is little capital integration. With the introduction of industrial policies and changes in corporate scale, the shift from incremental growth to stock restructuring has become a practical necessity. The integration of Junlebao is essentially the beginning of Mengniu’s integration of local and regional brands. It will also promote the entire dairy industry to accelerate on the path of intensive growth. On June 18, 2013, China Mengniu Dairy Co., Ltd. (referred to as "Mengniu Dairy") and Yashili International Holdings Co., Ltd. (referred to as "Yashili") jointly announced that Mengniu Dairy. A tender offer was issued to all shareholders of Yashili, and was accepted by the controlling shareholder Zhang International Investment Co., Ltd. ("Zhang International") and the second largest shareholder CA Dairy Holdings ("CA Dairy"), a wholly-owned subsidiary of Carlyle Asia Fund The irrevocable commitment of the offer is to sell a total of approximately 75.3% of the shares.
This is the largest merger and acquisition in the Chinese dairy industry so far, and it is also an important signal for Mengniu Dairy to develop its efforts in the milk powder field. After the giants join forces, they will use the advantages of both parties in terms of products, brands, channels, etc. to accelerate the overall upgrade of the high-end milk powder industry through resource integration and complementation.