, Columnist
Mengniu Should Have Gone Organic
High-end consumer products would have made a better target than dairy farms.
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The cows are coming home. But China Mengniu Dairy Co., which is taking over China Modern Dairy in an $892 million deal from KKR & Co. and CDH Investments Fund Management Co., should be concerned less about owning the farm and more about getting the right products on supermarket shelves.
Modern Dairy gives Mengniu access to a plant in New Zealand and farms throughout China. The timing is good, because milk prices are recovering after a multi-year glut: Mengniu, the nation's second-biggest maker of milk products after Inner Mongolia Yili Industrial Group Co., is working to keep costs down, and control of raw materials will help.