Mengniu Dairy may buy private milk powder company

China Mengniu Dairy Co Ltd, the country's largest dairy producer, suspended trading on Thursday amid speculation over a possible acquisition of Guangdong Yashili Group Co Ltd, a privately owned milk powder maker.

Both Mengniu and Yashili suspended trading in the Hong Kong Stock Exchange on the same day as media reports said earlier that Mengniu might take over Yanshili with an offer of tens of billions yuan.

Mengniu announced in May that it will pay HK$3.18 billion ($409.8 million) for a 26.9 percent stake in China Modern Dairy Holdings Ltd, which operates 22 dairy farms across the country. The move aims to complete its whole industry chain.

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