China Mengniu Says Has Been in Talks to Buy Modern Dairy

China Mengniu Dairy Co., the country’s largest dairy producer, said it had acquisition talks over supplier China Modern Dairy Holdings Ltd. that didn’t advance.

There were discussions, and there wasn’t much progress, Frank Ning, chairman of Mengniu, said after delivering a speech at a Hong Kong conference today.

Buying Modern Dairy, China’s largest raw milk producer, would give Mengniu more control over its milk supply as concerns about safety in the nation’s dairy industry linger. Maanshan-based Modern Dairy supplies Mengniu with unpasteurized milk.

The two companies have held discussions on the acquisition, Bloomberg reported in August. Mengniu blamed moldy feed given to cows for excessive toxins found in milk at one of the company’s warehouses in 2011.

(Corrects first and second paragraphs in story published Jan. 14 to show discussions took place that didn’t yield progress.)
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